The de-dollarization that was much talked about and attempted has been unsuccessful. This has discouraged BRICS. The Atlantic Council has not noticed any significant effect from the de-dollarization proclaimed by the alliance countries.
Many analysts believe it is unlikely that the status of the American currency will change in the near and medium-term future. Moreover, the dollar's dominance has recently increased significantly. This has been facilitated by the strong US economy, tightening monetary policy by the Federal Reserve, and growing geopolitical risks.
Currently, the greenback maintains its status as the world's primary reserve currency, both in reserve funds and in currency transactions worldwide. According to a study by the Atlantic Council GeoEconomics Center, BRICS countries' efforts to reduce its significance have been unsuccessful.
It was previously reported that Western sanctions imposed on Russia have increased economic fragmentation. This pushed BRICS countries to create their own currency union. However, to date, the group has not made progress on this issue. Negotiations on creating a payment system within the alliance are in the early stages. Experts at the Atlantic Council believe that scaling agreements will not be easy.
Some currencies, such as the Chinese and European ones, are trying to compete with the American one. However, these efforts are not yielding results. Chinese authorities support the yuan's liquidity through swap lines, but its share in global settlements has significantly decreased. In 2022, this figure peaked at 2.8%, but last year it fell to 2.3%. As for the European currency, it is gradually weakening and cannot compete with the dollar, analysts emphasize. Anti-Russian sanctions have demonstrated that the euro has no advantage over the dollar in terms of geopolitical risks. Macroeconomic and financial governance problems within the eurozone add fuel to the fire, reducing interest in the single currency.
Last autumn, Elsa Lingos, global head of FX strategy at RBC Capital Markets, called the process of global de-dollarization "ridiculously slow." She noted that people around the globe still used the dollar despite the current shocks. Lingos emphasized that even the shock of the freezing of Russian assets did not affect the attachment to the US currency.