BRICS Bank 2024: Will Debts Be Paid in US Dollars?

• China Development Bank and BRICS Pursue De-dollarization with New Development Bank (NDB)
• NDB Announces Plans to Raise $3 Billion in Local Currencies
• Expansion of BRICS Aids in Financial Stability
• Introduction of the Maharaja Bond
• Long-term Loans in Local Currencies: A Strategic Move by NDB

China Development Bank and BRICS Pursue De-dollarization with New Development Bank (NDB)

In a bold move to undermine the U.S. dollar's global dominance, the China Development Bank, in collaboration with BRICS (Brazil, Russia, India, China, and South Africa), launched the New Development Bank (NDB) with a vision towards de-dollarization. Their goal is to sustain economic projects that circumvent the use of the American dollar. Despite the inevitable accumulation of debt associated with such undertakings, BRICS and NDB are steadfast in their mission.

NDB Announces Plans to Raise $3 Billion in Local Currencies

As of January 2024, the NDB publicized an ambitious plan to amass $3 billion in local currencies within five years. The bank's principal focus is providing financial assistance to developing economies. This aid subsequently circulates cash to the countries supporting BRICS. However, the memory of struggling with debt in 2023 and the concerning rumors that they might need to revert to the U.S. dollar still linger.

Expansion of BRICS Aids in Financial Stability

Despite this, the BRICS bank remains unwavering in their mission to bypass the U.S. dollar. Measures are in place to ensure that NDB does not repeat a cycle of debt as experienced in the previous year. One significant step towards this goal was the expansion of BRICS in August 2023, with the inclusion of wealthy nations such as the UAE and Saudi Arabia, providing additional financial support for the NDB.

Introduction of the Maharaja Bond

Vladimir Kazbekov, the Chief Operating Officer of NDB, has announced that the bank is poised to launch its first bond, named the Maharaja Bond. The strategy lies in attracting investments in local currencies, targeting an equivalent of around $28 billion. This approach aligns with NDB's and BRICS' wider plan of sidelining the U.S. dollar while raising considerable funds and offering bonds worth billions of dollars.

Long-term Loans in Local Currencies: A Strategic Move by NDB

In addition to the introduction of the Maharaja Bond, the NDB has succeeded in creating long-term loans in local currencies of developing nations, thereby reducing their dependence on the U.S. dollar for transactions, which aren't subject to U.S. sanctions. This strategic move further reinforces BRICS' long-term mission of de-dollarization, and it is likely that the BRICS bank will continue to avoid the U.S. Dollar in 2024 to offset its debt.

Edited by Jonathan Stoker