The United Arab Emirates (UAE), Kingdom of Saudi Arabia and Egypt are among six nations that have been invited to join the BRICS group of nations, and will join it in Janurary 2024

What do you guys think what effects it will have on the global economy?

  • ShittyBeatlesFCPres@lemmy.world
    link
    fedilink
    English
    arrow-up
    4
    ·
    edit-2
    1 year ago

    Short term, it won’t be a huge deal economically. Long term, it might help with de-dollarization but you don’t conduct trade in the reserve currency for political reasons. It’s just the default. Contracts are written in dollars, shipping companies expect payment in dollars, they buy insurance with dollars, etc. etc. You can use other currencies now and nations do but it’s far harder and usually more expensive so countries (and, as important, companies) just don’t.

    I do think eventually, we’ll have a “basket of currencies” situation where no single currency defines the adjustments that have to be made if the buying or selling country has unforeseen inflation. But I think that’ll take way longer than the political changes. Political change happens all the time. Since 1450, there have been 6 reserve currencies.

    So, I think the economic changes will be symbolic and small while the political changes will be more meaningful.