Brics leaders act to hedge – not revolt – against US dollar dominance

The leaders of Brics nations - China, Russia, Iran, India, and others - gathered in New Delhi to sign the New Delhi Declaration, a document aimed at hedging against US dollar dominance rather than revolting against it. The summit, attended by international leaders such as UN Secretary General Antonio Guterres, WTO Director General Ngozi Okonjo-Iweala, and WHO chief Tedros Adhanom Ghebreyesus, marked the bloc's expansion to include four continents and nearly half of the world's population.

Rather than proposing a new world order or a Brics currency, the declaration aimed to ensure continued trade and financial cooperation even if the US dollar or institutions like the IMF and World Bank were used as political tools. The leaders emphasized the need to reform multilateral institutions, including the UN Security Council and the Bretton Woods system, to better represent the modern world.

They also sought to reform the Bretton Woods Institutions to enhance their legitimacy and address the needs of emerging economies. While local-currency settlement was presented as a practical mechanism to reduce transaction costs in bilateral trade, experts noted that it was more about minimizing the risk of dollar weaponization rather than a shift towards de-dollarisation.

The Brics Payment Task Force was tasked with developing interoperable payment and messaging channels, while members also aimed to build out their own local currency-based trading systems, though this process would take longer.