Iraq’s Interior Ministry placed a ban on U.S. dollar transactions across the country in a move to strengthen the Iraqi Dinar. The country wants to control the fluctuating black market exchange rate that plagued forex prices for Chinese Yuan and USD. The move will also help boost its native currency as the U.S. dollar will take a step back nationwide. The decision to ban the dollar comes at a time when Iraq expressed its interest to join the BRICS alliance. Iraq would accept the soon-to-be-released BRICS currency to settle international trade and sideline the USD.
In another recent update, Egypt will settle trade with China, Russia, and India, using the native currencies of the respective nations. Egypt will pay the Russian Ruble to settle trade with Russia and pay with the Chinese Yuan for business with China. Similarly, it will pay with the Indian Rupee while paying for goods and services conducted with India. The U.S. dollar could no longer play a role in cross-border transactions among these nations.
In addition, France became the first European nation to ditch the U.S. dollar for an LNG gas trade with China. France settled the payment by paying with the Chinese Yuan and not the dollar. The move marked a shift in global transactions and Western economies are now paying with the local currencies of BRICS nations.
Just a few days ago, Pakistan also settled trade for Russian oil imports by paying with the Chinese Yuan. The U.S. dollar took a back seat in all of these international transactions signaling that BRICS is stronger than expected.
China and Russia are convincing several nations to settle trade with the Chinese Yuan and not the U.S. dollar. Russia recently reached out to Saudi Arabia and urged the oil-rich nation to accept the BRICS currency after its launch. Saudi Arabia is the top oil exporter to the U.S. and Europe and if they force the West to settle payment with BRICS currency, the U.S. dollar, Euro, and Pound could be hit.
The next BRICS summit will be held in August in South Africa. The bloc of five nations will jointly decide on the formation of a new currency at the summit. The fate of the dollar will be put to the test when the currency is launched in the international markets.