Despite ongoing de-dollarization efforts instituted by the global south, the US dollar has continued its ascent to start the year, with the development being bad news for the BRICS bloc in 2025. Indeed, key alliance nations like China and India have specifically suffered from the continued strengthening of the greenback.
The global economy is now observing whether or not its continued increase in value can continue over the course of the next 12 months. Moreover, with US President-elect Donald Trump’s 100% tariff warning looming, how committed to de-dollarization the BRICS alliance remains to be seen.
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BRICS Get Harsh Reality in 2025: US Dollar Continues to Strengthen
Over the last two years, the BRICS bloc has embraced de-dollarization like never before. With sanctions implemented by the West in 2022, the bloc has sought to challenge the region’s hegemony by embracing trade in local currency. Those efforts saw the group surge in popularity. After remaining five strong for a decade, it more than doubled in size over the last two years.
However, its efforts to challenge the dominance of the greenback have yet to bear fruit. Indeed, the US dollar has continued its 2025 ascension, which has proven to be bad news for the BRICS bloc. Specifically, nations like China and India have seen their currencies suffer against the key global reserve asset.
The US dollar has appreciated since Donald Trump emerged victorious in the 2024 presidential race in November. Alternatively, the Asian currencies have hit a multi-year low, according to a CNBC report. The yuan, rupee, Japanese yen, and Korean won are among the list of currencies that have seen their value slip over the last several weeks.
Also Read: BRICS to Keep Ditching the US Dollar in 2025: Alliance Confirms
Since the November 5th election results, the US dollar is up 5.39%. A big reason has been the promise of the Trump campaign. The incoming administration has long discussed the necessity of maintaining the dollar as the world’s currency. Moreover, they have threatened repercussions on nations seeking to ditch it.
Moreover, many of the nations affected are facing a difficult predicament. The dollar is poised to “pose challenges for Asian central banks by increasing inflationary pressures through high import costs and straining their foreign exchange reserves if they attempt to support their currencies through intervention,” economist James Ooi told CNBC.
Therefore, they are unable to lower interest rates to cope with rising inflation and depreciating currency. Such a move would be “counterproductive,” Ooi notes. Therefore, the two key BRICS nations are caught in a notable struggle. Only time will tell how the nations seek a way out.
