Yuan Outperforms Dollar in BRICS for the First Time in Two Decades

• BRICS De-Dollarisation Plan See a Cheaper Yuan than the US Dollar for the First Time in 20 Years
• Overarching Reality of De-Dollarisation
• Borrowing in China's Yuan Cheaper than US Dollar for the First Time in Two Decades
• Change in Currency Landscape
• The Emergence of a Global Trend
• Increasing Use of Yuan Beyond China and Russia
• Expansion identified as a Threat to US Dollar

BRICS De-Dollarisation Plan See a Cheaper Yuan than the US Dollar for the First Time in 20 Years

In a significant move towards de-dollarisation by the BRICS nations, the Chinese Yuan has become cheaper than the US dollar, marking the first instance in two decades. The Atlantic Council report states that conducting short-term borrowing is now more affordable in the renminbi compared to the US dollar, shedding light on the shifting global currency perspectives.

Overarching Reality of De-Dollarisation

The continued evolution of international currencies reflects the reality of de-dollarization in the current climate. The initiatives driven by BRICS form part of a broader narrative explaining the predicted decline of the US dollar's global prevalence.

Borrowing in China's Yuan Cheaper than US Dollar for the First Time in Two Decades

Throughout 2023, the BRICS economic alliance intensified its stance on de-dollarization, largely driven by the presence of sanctions on Russia and potential sanctions for other bloc members. The alliance also worked towards enhancing unilateral trade in local currencies, setting a precedent that could be adopted globally.

Change in Currency Landscape

Although the US dollar has held its position as one of the most used global currencies, a change is on the horizon. One report underlines this shift, stating that, amidst BRICS developments, the Chinese Yuan is cheaper than the US Dollar for the first time in two decades.

The Emergence of a Global Trend

Notably, the report mentions that short-term borrowing in the renminbi is now more affordable than in the US dollar. This is not the only factor pointing to the diminishing dominance of the dollar. Various countries began acquiring gold throughout the past year, indicating a global trend towards diversification from central banks.

Increasing Use of Yuan Beyond China and Russia

China and Russia are not the only countries bolstering the use of the yuan. Trade settlements in the currency consist only 27% from these two nations, while a significant 70% comes from Beijing's trade with Asia, Brazil, Argentina, and other Gulf countries.

Expansion identified as a Threat to US Dollar

Earlier this week, US Senator Marco Rubio pointed to expansion as an additional danger to the US dollar's status. This viewpoint highlights the growing global consensus moving away from reliance on the US dollar. If more nations adopt these BRICS strategies, the United States' global reserve status could be under threat and may face irrevocable risk.

Edited by Jonathan Stoker