Even As BRICS Grow, The Dollar Is Unlikely To Lose Its Global Power Anytime Soon

BNY Mellon stated in a note that the expansion of the BRICS group of developing nations indicates another challenge to the dollar’s dominance in the global economy, but the dollar is unlikely to lose its status as the global reserve currency anytime soon.

At a summit last week in Johannesburg, leaders of Brazil, Russia, India, China, and South Africa invited Iran, Argentina, Saudi Arabia, the United Arab Emirates (UAE), Ethiopia, and Egypt into the club.

One of the goals of the BRICS is to find an option in contrast to the dollar, BNY noted in a report distributed on Friday.

It said that the augmentations of Iran, the UAE, Egypt and Saudi Arabia will make the new gathering a heavyweight in energy trades – especially oil – recommending a product container upheld by gold and oil could rise out of the new gathering.

An extended coalition would hold 75% of the world’s manganese, half of the globe’s graphite, 28% of the world’s nickel, and 10% of copper. Adding Saudi Arabia, the UAE, and Iran, to the BRICS in the interim would incorporate three of the world’s biggest oil exporters and make up 42% of worldwide oil supply.

In any case, BNY Mellon added this wouldn’t be sufficient to challenge the dollar’s strength.