Three Ways BRICS currency will affect the U.S. Dollar

BRICS is also looking to launch a new currency in the markets and settle trade among themselves with it. The development is in its initial steps and has a long way to go in the formation of the currency. However, one thing is certain, the BRICS currency is aimed at targeting the U.S. dollar to uproot it as the world’s reserve currency.

If a BRICS currency is launched, the U.S. dollar could face challenges in three different directions. The U.S. dollar could be affected in the ways mentioned below:

1. The ‘supply and demand’ for the U.S. dollar could be reduced on the international stage

2. The U.S. dollar’s position as the world’s reserve currency could begin to weaken

3. Local currencies could strengthen and challenge the U.S. dollar in the currency markets

Also, all these three developments could occur within two years if the BRICS alliance launches its own currency. Read here to know how many sectors in the U.S. will be impacted if BRICS ditches the dollar for trade.