BRICS: Crypto Trade Skyrockets 257%, China & Saudi Arabia Reach $1.78B

• BRICS Trade Boost Negatively Impacts US Dollar
• Emerging Trade Surplus Between China and Saudi Arabia
• Recent Currency Swap Agreement
• Implications of the BRICS Trade Rise on the US Dollar
• Potential Consequences for the US

BRICS Trade Boost Negatively Impacts US Dollar

As trade among BRICS nations increases, the US dollar seems to be the first casualty. In particular, BRICS members China and Saudi Arabia have set a record for their trade surplus in 2023. The surplus is considered a positive benchmark of transactions between two nations, indicating that exports outweigh imports.

Emerging Trade Surplus Between China and Saudi Arabia

The Asian superpower, China, has preserved its status as the principal trading partner with Saudi Arabia. In September 2023, Saudi Arabia's trade surplus with China escalated by 257%, hitting a new peak of $1.78 billion. This growth signifies a 257% spike compared to the preceding month of August.

Recent Currency Swap Agreement

Recently, a currency swap agreement intended for cross-border transactions was signed between BRICS members China and Saudi Arabia. This arrangement favors their respective currencies, the Saudi Riyal and the Chinese Yuan, over the US dollar. A cap of 50 billion yuan or 26 billion riyals have been set for the three-year agreement, allowing trade transactions to be settled in local currencies.

The new agreement excludes the US dollar from up to $7 billion worth of trade between China and Saudi Arabia, two BRICS nations. This development underscores the significance of local currencies and sidelines the US dollar in cross-border transactions, bolstering the de-dollarization initiative launched by BRICS.

Implications of the BRICS Trade Rise on the US Dollar

BRICS aims to topple the global reserve status of the US dollar and replace it with local currencies. The impact of this move on various sectors in the US could be significant if BRICS discontinues the use of the dollar.

Potential Consequences for the US

This could result in the weakening of the US dollar, potentially complicating deficit funding. If the US dollar loses the supply and demand dynamics, billions of US dollars could circulate back to the domestic market. This could trigger hyperinflation in the US and wreak havoc on the equity market and overall American economy.

Edited by Jonathan Stoker