The BRICS countries continue to make significant moves regarding the US dollar. Check out the latest one and some details about this means below.
BRICS significant moves
Some members of the BRICS economic alliance are getting rid of assets worth billions of dollars that are backed by the US government.
Recent data from the Treasury Department indicates that China is leading the way, with a reduction in its holdings of US treasuries from $835.4 billion in June to $821.8 billion in July.
This amounts to a decrease of $13.6 billion in just one month. While China is still the second-largest foreign holder of US treasuries globally, it has sold a total of $117.4 billion of US government debt in the past 12 months.
Brazil, on the other hand, has decreased its stash of US treasuries from $227.4 billion in June to $224.7 billion in July, or approximately $2.7 billion.
It has been reported that India has decreased their holdings in US treasuries by $2.3 billion, while the United Arab Emirates also saw a decline of $300 million in their US treasury trove from June to July.
A recent report by Nikkei Asia states that China is reducing their US treasury holdings to protect the yuan from a strong US dollar.
This month, the Chinese yuan (CNY) fell to $0.136 in comparison to the US dollar, a level last seen in January 2008.
When a country sells US treasuries, the money collected from the sale may be used by the central bank to accumulate local currency and increase its value.
The latest on BRICS
According to venture capitalist Chamath Palihapitiya, the collaboration among the BRICS nations to achieve any significant goal is highly unlikely due to the differences that exist among them.
Despite being economically aligned, the stark differences make it challenging to achieve any meaningful collaboration.
The business magnate further adds that the possibility of BRICS developing a currency framework to compete against the US dollar is doubtful. Check out more details about this in our previous article.
