• Thailand is the latest country to apply for BRICs membership, signalling a decreased dependency on the US dollar.
• The value of the dollar is steadily reducing in popularity, with non renewal of the Saudi petrol agreement further highlighting this trend.
The expansion of BRICS (Brazil, Russia, India, China, and South Africa) with Thailand being the latest country showing interest in joining the bloc could potentially impact the future dominance of the US dollar.
Effect On Share Of The Economy
An expanded BRICS would represent a larger share of the global economy, potentially increasing the influence of member countries in international trade and finance. This could lead to a greater use of alternative currencies in global transactions, reducing reliance on the dollar.
BRICS has already established the New Development Bank (NDB) and the Contingent Reserve Arrangement (CRA) as alternatives to Western-dominated institutions like the IMF and World Bank. Further expansion could bolster these institutions, providing a platform for financial cooperation and investment that bypasses the dollar.
Thailand Applies For Membership
Thailand’s recent application to join BRICS is a significant development that underscores the bloc’s growing appeal and potential influence. Thailand’s strategic location in Southeast Asia makes it an attractive addition to BRICS. As a regional economic hub, Thailand could enhance BRICS’ influence in ASEAN (Association of Southeast Asian Nations) and strengthen economic ties between BRICS countries and Southeast Asia.
Thailand’s application to join BRICS reflects broader geopolitical dynamics where countries are seeking to balance their relationships with major powers. By joining BRICS, Thailand could be aiming to diversify its foreign relations and reduce its dependency on Western-dominated financial systems.
With more countries joining BRICS, there is a stronger incentive to develop alternative financial mechanisms that reduce reliance on the US dollar. Thailand’s participation could contribute to the growth and utilisation of institutions like the New Development Bank (NDB) and initiatives aimed at creating a multipolar financial system. As countries seek to reduce their dependence on the US dominated financial system, the demand for the dollar as a reserve currency is waning. This comes in light of the recent decision of Saudi Arabia to not renew the petro dollar agreement with the US, due to its restrictions on selling oil purely in dollars.
The Global Outlook
The expansion of BRICS and the growing interest of other countries in joining the bloc reflect a broader trend towards diversification in global finance. This also signifies the bloc’s growing attractiveness and the shifting dynamics in global economic and geopolitical landscapes.
While the immediate impact on the dollar may be limited, the cumulative effect of more countries joining BRICS could contribute to a gradual shift away from dollar dominance.
