BRICS pushes local currencies again, but the dollar still holds the market

BRICS leaders renewed their call for greater use of local currencies in intra-bloc trade at their summit last weekend, but experts say the group remains far from loosening the dollar's grip on global finance.

The bloc wants to cut its reliance on the greenback because of geopolitical tensions, economic sanctions, U.S. tariff policy and frequent devaluation of member currencies. Yet the gaps between members, from financial integration to deep political distrust, have kept de-dollarization largely at the level of talk.

What the summit produced

South African President Cyril Ramaphosa told the summit that BRICS should "press ahead with greater use of local currencies, stronger cross-border payment systems and deeper financial interconnectivity."

Iran and Russia, both hurt by U.S. sanctions that limit their ability to trade in dollars, pushed for the bloc to build payment, settlement and depository infrastructure of its own. Iranian President Masoud Pezeshkian described the current financial system as "vulnerable to political shocks due to its concentration on a limited number of currencies."

But the BRICS 2026 declaration contained no mention of a common currency and no firmer details on trade settlements or investments in local currencies. The BRICS Payment Task Force was instead asked to work on "practical solutions for cross-border payments."

The dollar is still dominant

Data from the Bank of International Settlements shows the U.S. dollar made up 89% of the forex market as of April, up 1 percentage point from a year earlier. The euro accounted for 29% and the yen 17%. Oil and gold, two of the world's most traded commodities, are still denominated in the greenback.

The 10 BRICS member countries together accounted for 27% of world output, 24% of merchandise exports and 22% of foreign direct investment inflows in 2024, according to a United Nations Trade and Development report released in March. The report said this "brings fresh opportunities, avenues for cooperation and vast potential," but noted that intra-BRICS trade was only about 5% of world trade as of 2024.

U.S. President Donald Trump has threatened the bloc with tariffs over any move away from the dollar. "We require a commitment from these Countries that they will neither create a new BRICS Currency, nor back any other Currency to replace the mighty U.S. dollar, or they will face 100% Tariffs and should expect to say goodbye to selling into the wonderful U.S. Economy," he wrote.

Why unity keeps failing

Jayant Krishna, senior fellow at the Center for Strategic and International Studies, said BRICS lacks the unified institutional, financial and macroeconomic infrastructure needed to replace the "inherent liquidity and trust" of the dollar globally.

Reema Bhattacharya, head of Asia research at Verisk Maplecroft, said Russia and China now settle close to 90% of their trade in rubles and yuan, but that shift was driven by U.S. sanctions after 2022 rather than coordinated BRICS policy. Most BRICS currencies lack deep liquid markets outside their home economies, which discourages exporters from accepting them and keeps dollar invoicing the easiest route for global commodities.

She called the India-China rivalry "the single biggest brake on cohesion across the bloc." China is one of India's largest trading partners, with total trade at a record $151.1 billion in the year ending March 2026. India's deficit with China rose to a record $112.16 billion, up from $99.21 billion. India's goods and services trade with the U.S. was around $239 billion in 2025, with a goods surplus of $58.4 billion and a services surplus of $4.7 billion.

Krishna Bhimavarapu, APAC economist at State Street Investment Management, said members have vastly different priorities. Russia and Iran want less dollar exposure because of sanctions risk, China wants wider international use of the renminbi while keeping capital controls, and India supports greater use of the rupee.

For Nigerian businesses and the naira, the practical signal is that dollar invoicing for oil and other commodities is unlikely to change soon. That keeps demand for the greenback firmly in place across Africa's major trading relationships.