The global financial sector will face an abrupt rejig if the BRICS alliance announces the launch of a new currency. The global trade balance would experience a shift, and the loyalty towards the US dollar will be tested. The US might actually begin paying for its foreign policy mistakes, as developing countries are unable to forget the injustice done towards them by the White House policies.
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What Will Happen If BRICS Announces That a Currency Will Drop Tonight?
We have to make it clear that this is only a hypothetical scenario, and the BRICS alliance will not launch its currency tonight. However, we will explain ‘what could happen’ if such a strategy is pulled by the alliance and takes everyone by surprise. Below are the 3 major US sectors that would be affected if such a thing happens before you head to bed.
- Reduced Dependency on the US dollar.
- Impact on capital flows and exchange rates.
- Geopolitical shift away from the US and the West.
The only reason why the US dollar is still dominant is that there is no alternative option in the market. If BRICS brings that ‘alternative option’ to life with the launch of a new currency, developing countries will take it. It would lead to reduced dependency on the US dollar as a shift in the financial sector would be imminent.
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Also, capital flows will be impacted majorly as investors will begin readjusting their portfolios. The reserve currency status, which the US dollar thoroughly enjoys, will be tested. There is no doubt that the new BRICS currency will face volatility and trust issues, but the developing world would absorb it, just to end reliance on the US dollar, which they have always been looking forward to.
The launch of a BRICS currency is a strong geopolitical signal to the emerging economies. It would be their best chance to usher in a global change and put the West behind. The rise of a multipolar world will become a reality, and countries will no longer face economic consequences through sanctions. The West and the East will have to rewrite policies, giving emerging economies an upper hand in negotiations.
