putin

BRICS Bypasses the Dollar: $4 Billion Arms Deal in Local Currency Shakes Global Trade

EDITOR'S NOTES

In a bold move, Russia paid $4 billion for Indian-made arms using local currencies, sidelining the US dollar entirely. This significant transaction underscores the BRICS alliance’s de-dollarization strategy, aiming to strengthen local currencies and reduce reliance on the US dollar. By settling trades through India’s Vostro bank accounts, Russia not only bypasses US sanctions but also reinforces the economic independence of BRICS nations. This shift signals a growing challenge to the dollar’s dominance in global trade.

Russia purchased arms manufactured by its BRICS counterpart India by paying $4 billion in local currencies and not the US dollar. The Indian-made arms and equipment were procured by Russia citing ‘defense purposes’. The entire payment of $4 billion was cleared using the Rupee and the US dollar was left out from the transaction.

The deal came straight from the BRICS playbook of putting local currencies ahead of the US dollar for trade. The alliance is using every opportunity to strengthen the de-dollarization agenda and put local currencies to use in the markets. Read here to know how many sectors in the US will be affected if BRICS ditches the dollar for trade.

BRICS: India & Russia Settle $4 Billion in Local Currencies, Sidelines US Dollar

india russia flags brics
Source: Pixabay

Russian officials settled the $4 billion arms deal payment using India’s special Vostro bank accounts. BRICS member India has allowed access to 22 countries to pay in local currencies through the Vostro accounts, which is overlooked by the Reserve Bank of India (RBI). The trade deals are also helping Russia bypass the US sanctions and conduct business worth billions in local currencies.

In addition, India is also settling trade with Russia using local currencies through Vostro accounts and not the US dollar. “Indian exports are also being settled from the Russian funds from the Vostro account,” said an official on the condition of anonymity. The move is making the native economies and local currencies of BRICS nations India and Russia stronger.

The BRICS alliance is moving away from the US dollar with new trade deals being settled in local currencies. The upcoming decade will be challenging to the US dollar as many more developing nations are following the BRICS module. The de-dollarization agenda is being spread across the world with developing countries looking to settle trade in local currencies.

This article originally appeared on Watcher.Guru

Print Friendly, PDF & Email

sign up for the newsletter

By signing up, you agree to our Privacy Policy and Terms of Use, and agree to receive content that may sometimes include advertisements. You may opt out at any time.

7 steps - Lead Gen (popover & inserted into pages)