BRICS+ controls 42% of global central bank FX reserves, likely contributing to the global de-dollarisation process. Gold is the biggest potential alternative to the US dollar for the bloc. Despite active buying by BRICS+, gold is still only 10% of their central bank reserves, half of the global average. Prospects for global diversification towards BRICS+ currencies, even a synthetic one, are limited by the very modest external liabilities of the member countries. Therefore, the de-dollarisation of global FX reserves will largely stand to benefit the developed market rather than the emerging market FX sphere.
In other areas, BRICS+ is increasing its foothold in regional trade, becoming increasingly focused on the trade between member countries, and gaining importance as a trade partner for other emerging markets, especially in the fuel trade. BRICS+ accounts for 37% of the EM fuel trade, a key area of interest for de-dollarisation.
Meanwhile, the power of the bloc is limited by its only 30% share of global oil production, (matching the combined share of USA, Canada, and Mexico, and the trade in the Americas is highly dollarised), and a more modest and stable 20% share of BRICS+ in the overall global trade vs. the DM’s much bigger 60% share.
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