BRICS will strengthen by trading energy in national currencies
Tom KirkmanIndependent Project Manager
The BRICS alliance will likely to continue to strengthen its economic clout through trading energy (oil, LNG, nat gas, coal) using their own national currencies rather than using the dollar or euro.
While the dollar is effectively the world’s reserve currency, its share of global central bank currency reserves has been shrinking over the years.
● In 2020 about 59% of global central bank currency reserves were held in dollars.
● But in 2000, that number was 70%.
“The reach of the U.S. dollar as the global reserve currency is declining as central banks around the world reduce the share of U.S. dollar reserves, according to the International Monetary Fund (IMF).
“The share of U.S. dollar reserves held by central banks fell to 59 percent—its lowest level in 25 years—during the fourth quarter of 2020,” IMF cited its own Currency Composition of Official Foreign Exchange Reserves (COFER) survey.”
“Russia’s energy giant Gazprom says it has signed an agreement with China to start payments for gas supplies to China in yuan and roubles instead of US dollars, in a sign of warming relations between Beijing and Moscow, which is under Western sanctions.
“The new payment mechanism is a mutually beneficial, timely, reliable and practical solution,” Gazprom CEO Alexei Miller was quoted as saying in a statement following a video conference meeting with the head of China’s oil group CNPC, Dai Houliang.”
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“China’s purchases of Russian oil have soared in order to reap the benefits of a plunge in European buying and tumbling prices for Russian oil, just when Beijing needs it most as the Ukraine crisis pushes Moscow in search of alternative markets.
… But it wasn’t just Russian oil that Beijing was waving in: China’s coal imports from Russia also exploded in August, exceeding last month’s level and hitting the highest in at least five years …”