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While the main forces will multiply the calls to reduce their dependence on the US dollar, the key player has just killed the door to any breaking: India. In a tense international context, where Western sanctions force certain countries to explore alternatives to the monetary system dominated by a greenback, the new Delhi decides to play a stability card. By saying he has “Absolutely no interest” In order to participate in the dynamics of dedollarization, India transmits a strong signal to its partners within BRICS and South Global.
In short
- India categorically rejects the efforts to deduct BRICS and Global South.
- This rejection contrasts with the positions of Russia and China, which actively campaigns for alternatives to a dollar -based system.
- Several economic and diplomatic reasons explain Indian position, including its important reservations in dollars and its connection with the United States.
- This rupture could have great consequences about the money ambitions of the southern global and the future of the International Financial Code.
India is disoclitated from a dedollarization project
In short, the Indian government has taken all expressly confirmation that it would not support dedollarization efforts made by some influential BRIC members. In fact, India has absolutely no interest in dedollarization or any initiative to undermine the US dollar.
This clear position, unambiguously, contrasts strongly with the discourse, which has been brought by countries such as Russia and China, which actively campaign for the progressive abandonment of the dollar in international trade, for the benefit of their own currencies or potential common currency BRIC.
Such a location reflects a strategic choice dictated by several main economic and diplomatic considerations:
- Significant dollar reserves: India has a significant share in its exchange reserves in USD, which considers the guarantee of financial stability;
- Business relations with the United States: Economic ties with Washington are necessary for new Delhi, especially in technology, energy and defense sectors;
- Interest in macroeconomic stability: Indian authorities are afraid that the shift towards the alternative system does not cause monetary instability difficult to handle;
- The absence of immediate benefits: unlike sanctioned Russia or China, which is looking for leadership, India has no direct profit that should be removed from a break with a dollar system.
This categorical rejection thus emphasizes the will of India to maintain a financial trajectory independent of geopolitical tension between blocks, even in an alliance such as BRICS.
A unit of cracked BRICS: cash voltage in the global south
While India reaffirms its support for the dollar hegemony, other members of Bric, especially Russia and China, are tirelessly striving to circumvent western money districts.
The process of dedollarization grows on a global scale. Such posture is part of the dynamics initiated after economic sanctions imposed on Russia, which has since strengthened its partnership with countries prepared for trade with Rubly, Yuan or through alternative fast systems.
Beijing continues to support Yuan’s internationalization, especially by the incentive of its business partners to increase their reserves.
However, these initiatives, if they obtain the land, inform about growing cleavage in Bric. In addition, the common dedollalalarization agenda seems to be threatened by a lack of consensus among its most influential members.
India, is far from marginal in the group, it represents savings of considerable size and demographic scales. Its refusal to participate in the mechanisms of monetary substitutions therefore weakens the credibility of a possible project of a common currency or alternative financial system. The differences are deep. Where Russia works from political necessity and China geoeconomic ambition, India chooses caution and stability.
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I graduated from Toulouse and Blockchain Consultant Certification Certification Certification Certification I attached to the adventure of Cointtribuna in 2019. I was convinced of the potential of blockchain to transform many sectors of the economy, and I committed to raising awareness and inform the general public about how the ecosystem took place. My goal is to allow everyone to better understand blockchain and take the opportunity they offer. I try to provide an objective analysis of messages every day, decrypt trends on the market, hand over the latest technological innovations and introduce the economic and social issues of this revolution.
Renunciation
The words and opinions expressed in this article are involved only by their author and should not be considered investment counseling. Do your own research before any investment decision.