Interview: China, BRICS and the US dollar

Can the BRICS “de-dollarize” the world economy?

China and the other so-called “BRICS” nations (Brazil, Russia, India and South Africa) chafe under the dominance of the dollar in the world economy, because of the geopolitical power it gives the US government. “De-dollarizing” the world economy is a top agenda item at the BRICS summit starting 22 October in Kazan, Russia. What’s their chance of success? NADEL’s Chris Humphrey suggests in an interview with SRF’s 10 vor 10 news program that de-dollarization might make for a good soundbite, but is not a realistic goal that the BRICS can achieve. The role of the dollar is declining slowly but will likely remain dominant for many years to come, since a benchmark currency is needed for many aspects of world trade and there is currently no viable alternative. Dollar dominance will end not from any actions by the BRICS governments, but rather inept fiscal and monetary policy management by the US government and an overall decline in the US economy, leading to a loss of confidence among millions of individual economic actors.