BRICS expansion fuels gradual shift away from dollar dominance

The BRICS grouping, expanded to 11 members plus partners, is promoting currency diversification by enabling bilateral trade to be settled in the participants’ own money, rather than the U.S. dollar. In the energy sector, Russia has accelerated rouble-renminbi settlements with China, while India and Russia are developing rouble-rupee mechanisms for oil trade. China continues to push the renminbi in its exchanges, seeking alternatives that blunt sanction effects.

Meanwhile, the euro already serves as a primary invoicing currency for intra-European trade, though many oil and gas imports from Norway and Algeria are still priced in dollars. Analysts argue that de-dollarisation will not eliminate the dollar but will gradually diversify global reserves and could raise U.S. borrowing costs as foreign demand for Treasury bonds wanes. A recent recommendation by Norges Bank to cut dollar-bond exposure in Norway’s sovereign wealth fund illustrates this trend, though the fund will retain significant dollar holdings.