- China and Russia have tried to fuel the dedollarization movement over the past year.
- But the buck is likely to remain the dominant currency in international trade, according to India’s oil and gas minister.
- It’s “not so easy” to displace the greenback, Hardeep Singh Puri told CNBC.
The US dollar isn’t going to lose its position as the world’s top currency anytime soon despite the BRICS countries’ efforts to undermine it, according to a top Indian politician.
Speaking to CNBC at the Business 20 meeting in New Delhi, oil and gas minister Hardeep Singh Puri said he didn’t expect “de-dollarization” – a co-ordinated movement to reduce the buck’s dominance of international trade – to happen anytime soon.
“I wish all currencies very well – I think the Indian rupee should be the lead currency in the world, but I’m also a realist,” he told the outlet.
“The dollar’s prominence and the dollar’s current position, I don’t know what kind of change would be affected but I don’t see it… it’s not so easy,” Puri added.
The buck is the primary currency used in global trade, meaning that futures contracts for commodities like crude oil and natural gas are often priced in dollars – which is a massive source of economic power for the US.
For example, after Russia invaded Ukraine in February 2022, Washington was able to freeze half of Moscow’s foreign currency reserves and exclude the country’s banks from the SWIFT international payments system.
As a result, both India and China have started to settle energy import contracts from Russia using the Chinese renminbi, according to reports by Reuters.
The BRICS group, consisting of Brazil, Russia, India, China, and South Africa, has also been weighing up the idea of developing a common currency – but didn’t announce a new dollar alternative at the bloc’s summit in Johannesburg earlier this month.