Posted on 08/24/2023 12:34:56 PM PDT by MarMema
The BRICS founding member recently started purchasing oil from the UAE using local currencies as part of a wider push towards de-dollarization.
The Reserve Bank of India (RBI) has started asking local banks to drop the US dollar in transactions with the UAE and instead use the Emirati dirham or Indian rupee, sources familiar with the matter told Reuters.
"The RBI has asked banks to encourage clients and corporates to initiate INR-AED trades gradually, instead of using the dollar," a treasury official at a private bank told the British news outlet.
Indian foreign exchange dealers were informed of this new status quo during a seminar this month by an RBI official.
The unnamed sources claimed the decision by New Delhi is part of a “broader aim of promoting settlement in local currencies with countries with which India has a trade deficit." Furthermore, the move is expected to boost the rupee's global reach and reduce the outflow of dollars from the country.
According to government data, India's trade deficit with the UAE stands at $21.62 billion, equaling 8.2 percent of the country's total deficit.
This latest development is part of a growing de-dollarization trend sweeping the Global South.
Earlier this month, India and the UAE started settling bilateral trade in their local currencies. This was a result of an agreement signed last year between the RBI and the UAE Central Bank to promote “the use of local currencies (rupee and dirham) for cross border transactions.”
The UAE is India’s fourth largest supplier of oil and the second largest provider of natural gas, “which makes de-dollarization particularly significant,” the Hindustan Times noted last month.
Recently, Pakistan paid for its first imports of discounted Russian crude oil in Chinese currency, marking a significant shift in the South Asian country’s policy of paying for exports in US dollars.
Many countries across the region have begun to embark on this path, including Iraq, which in May issued a ban on the use of US dollars in both business and personal transactions.
https://new.thecradle.co/articles/iran-saudi-arabia-uae-egypt-to-become-full-members-of-brics
USA is now a semi going downgrade on icy road with Biden driving.
This works so long as the people who end up with UAE or Indian currency are making purchases of UAE or Indian products. But the moment they have to go to the international market to buy something that seller will demand either Euros or dollars. Then they’ll have to convert their other currency, which will undoubtedly have some fees. Even if the fees are nominal, they will increase the cost of whatever is purchased. Essentially, this is a tax on purchases. People avoid taxes whenever possible.
I don’t think that is true. The Saudis have been paying China in yuan.
Everyone out there is trading in other currencies.
Its all because of him!!! Under Trump none of this would have happened.
He alienated the Saudis, and they went over to brics.
He is destroying this country.
What do you think "Build Back Better" means?
One example.
I see it all the time in non western news
“But the moment they have to go to the international market to buy something that seller will demand either Euros or dollars. “
You just let the cat out of the bag on what the BRICs replacement for the US dollar will be.
It will be the Euro.
And the EU has every incentive to co-operate because then they get the benefit of being the internatinal currency.
It goes back a long way, but especially with the Ukraine war, the USA has managed to alienate all their allies along with neutrals or hostiles.
For the EU, the US blew up their pipeline, then rubbed their noses in it and made them pretend it was Russia, or the Poles, or the Ukrainians.
Until a few months ago, I thought the Euro would be the one to collapse, given the stupidity of how they operate their energy systems, etc.
But the Regime running the USA shows even greater foolishness, inciting their enemies to create an alternative international currency, and giving allies such as the EU every incentive to join them.
If the US dollar falls, so will the decadent DC Globohomo Regime - and good riddance !
Why would they deliberately destroy a country in which their grandchildren are growing up?
You just let the cat out of the bag on what the BRICs replacement for the US dollar will be.
It will be the Euro.
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Disagree. For many reasons. Every country that ever was in/ or threat of war never had any confidence in their currencies.Billions of $$$was transferred OUT of European countries in WW1, WW2, when the Euro dollar was being established….( into the US and Swiss dollar), and as we are seeing now. It took decades for their currencies to recover.
Secondly, the EU is leading the charge for abolishment of cash, and instate a sovereign digital currency.
History ( and today) shows nations run to the US with their money in times of uncertainty. Today, seven of the EU’s major banks have suffered massive amounts of cash withdrawals, many going to the U.S. and the East. Western Money flowing INTO the US is at a high….but interesting enough NOT US government bonds, but the US “ private” entities, real estate, our stock market, etc.
Plainly put, countries under threat of attack, war, declining economy or worse yet, foreign tanks rolling through their streets ALWAYS moved their money out of the country into the U.S…..which explains why the USD is not DEAD, not yet.
By 2026 we will see major money moving into the “East”. This global USD “ de- dollarization” has just started-stay tuned- it won’t happen overnight- but it will.
“I don’t think that is true. The Saudis have been paying China in yuan.”
The United States must appear to be a schizophrenic ally. Every four or eight years the US policy can perform a power-slide 180-degree turn. To hedge their security bets the Saudis have purchased a couple of Chinese refineries and sold some oil in Chinese currency. In terms of overall Saudi sales, it’s miniscule. It’s essentially a bribe. The alternative would be to buy Chinese military gear which would have some very bad longer-term effects. (See what it did to US/Turkish relations when Turkey bought an S-400 Anti air system.) This bribe gets the Chinese to apply pressure on the Iranians to lay off their ongoing sabotage and attacks, it calms down the Yemen war somewhat and it gives the Saudis leverage with the Americans. It does not represent a sea change in Saudi US economic relations, and it does not threaten the dollar.
Pakistan has no foreign exchange left. The Chinese have given them some money and they will buy with it what they can. Pakistan is on the verge of total collapse. Recent flooding has destroyed their crops, and they face starvation. The power is turned off in the entire country for hours anad sometimes days as they don’t have enough oil to run the system. They don’t have enough money to budge the world’s foreign exchange needle one inch. The Russians are almost giving their oil away. I wouldn’t worry this is a bad thing for the US.
Let’s see, where to start. The Euro was on its way to being a substantial force in the world. Then the EU decided to seize assets in Cypress. See link. This caused everyone who could to move their money from Euros to dollars and the Euro has sense declined in the percentage of world trade, down to the present twenty percent from, if I recall, about forty percent. The Euro will be gone at some point because adopting it was great for Germany and France, but destroyed Greece, Spain and Italy. The only way those countries will EVER grow again is to dump the Euro. It’s days are numbered.
As far as the US destroying the pipeline, hogwash. The US had already achieved its goals. Destroying the pipeline would have been a ridiculous and dangerous thing to do to an ally. The most likely candidate was Gazprom because they were under contract to deliver either gas or pay the penalties for not delivering gas. But if the pipeline was destroyed Gazprom was relieved of their contractual obligations by force majeure.
one attempt to mend this situation, Pakistan leased 4 berths of its Karachi Port to the UAE for 50 years in exchange for a $220 million immediate payment.
Earlier in June, Pakistani authorities announced a barter trade agreement with Russia, Iran, and Afghanistan to purchase oil, liquefied natural gas (LNG), liquefied petroleum gas (LPG), wheat, iron, steel, coal, fruits, nuts, and vegetables without using the US dollar, in addition to a discussion with Iran involving dropping the US dollar in exchange for trade with Asian nations and implementing a non-SWIFT financial messaging system.
https://new.thecradle.co/articles/iran-pakistan-ink-five-year-trade-cooperation-plan
June
The first shipment of Russian oil arrived yesterday, 12 June, and was offloaded at the port in the southern city of Karachi.
Pakistan Petroleum Minister Musadik Malik said the government-to-government (G2G) purchase of Russian oil consisted of 100,000 tonnes and that the “payment (was) made in RMB.”
Pakistan is on the verge of total collapse. Nothing they do is going to move the forex needle even a bit. They are a nuclear armed state where people are starving in the dark. The last thing we need to worry about is what they do with regards to the dollar. If anything, we need to support them with free oil, wheat, and security assistance. If the government collapses, then something like several hundred nukes will be up for grabs.
Apparently, there’s a plan to swoop in and seize the nukes. Pakistan has started moving them randomly around the country in unmarked vans. Scary.
nothing to see here, move along...means nothing.../s/
If the Cypress bank seizures moved countries away from the Euro, seizing central bank assets and exclusion from SWIFT will do so even more for the dollar.
The Euro is still 30% of international currency transactions, the crosses exist for every country, and becoming the international currency solves the EU austerity/borrowing tradeoffs.
https://www.bis.org/statistics/rpfx22_fx.pdf
Because the international currency gets to print and borrow w/o inflation, devaluation and high interest rates.
The EU has every incentive to want to do this.
(BTW People in europe overwhelmingly believe the US blew the pipeline. )
Team Kabul Withdrawl is going to forcibly seize nukes in Pakistan ?
I can hardly wait.
That was why I posted it.
Many say India is on the fence.
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