Russia purchased arms manufactured by its BRICS counterpart India by paying $4 billion in local currencies and not the US dollar. The Indian-made arms and equipment were procured by Russia citing ‘defense purposes’. The entire payment of $4 billion was cleared using the Rupee and the US dollar was left out from the transaction.
Also Read: BRICS: Russia & China Presidents’ Meet to End US Dollar
The deal came straight from the BRICS playbook of putting local currencies ahead of the US dollar for trade. The alliance is using every opportunity to strengthen the de-dollarization agenda and put local currencies to use in the markets. Read here to know how many sectors in the US will be affected if BRICS ditches the dollar for trade.
BRICS: India & Russia Settle $4 Billion in Local Currencies, Sidelines US Dollar
Russian officials settled the $4 billion arms deal payment using India’s special Vostro bank accounts. BRICS member India has allowed access to 22 countries to pay in local currencies through the Vostro accounts, which is overlooked by the Reserve Bank of India (RBI). The trade deals are also helping Russia bypass the US sanctions and conduct business worth billions in local currencies.
Also Read: Top U.S. Bank Warns BRICS, Says the Dollar Cannot Be Replaced
In addition, India is also settling trade with Russia using local currencies through Vostro accounts and not the US dollar. “Indian exports are also being settled from the Russian funds from the Vostro account,” said an official on the condition of anonymity. The move is making the native economies and local currencies of BRICS nations India and Russia stronger.
Also Read: BRICS: Russia Makes Massive Oil Discovery
The BRICS alliance is moving away from the US dollar with new trade deals being settled in local currencies. The upcoming decade will be challenging to the US dollar as many more developing nations are following the BRICS module. The de-dollarization agenda is being spread across the world with developing countries looking to settle trade in local currencies.
