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16 Feb, 2024 15:51

Egypt ditching US dollar – diplomats

The North African nation has announced plans to use national currencies for trade with BRICS partners
Egypt ditching US dollar – diplomats

Egypt plans to negotiate a shift away from the US dollar toward national currencies for settling trade with other BRICS states, according to a statement released by the Ministry of Foreign Affairs earlier this week.

Using national currencies will alleviate the rising costs of using foreign currencies as a result of high global inflation, the ministry said, citing Ragy El Etreby, the country’s newly appointed ambassador to BRICS, who also serves as assistant foreign minister for international and regional economic affairs.

The announcement represents another step in the direction of de-dollarization being pursued by BRICS, a group of emerging economies that previously comprised Brazil, Russia, India, China, and South Africa but was expanded at the beginning of this year to include five new members, including Egypt.   

Data from 2022 and 2023 shows that Egypt’s trade turnover with BRICS members – both founding and new – amounted to $46.673 billion, which is more than a third of the country’s total foreign trade.

The global trend toward using national currencies in trade instead of the US dollar gained significant momentum after Russia was cut off from the Western financial system and had its foreign reserves frozen in 2022.

The BRICS countries are actively boosting the use of national currencies in mutual trade, and have even signaled the possibility of introducing a new single trade currency at the next summit in August. While such a currency is still a work in progress, some Western officials have admitted that the newly enlarged BRICS, which, in addition to Egypt, now also includes Saudi Arabia, Iran, Ethiopia, and the United Arab Emirates, has the power to topple the US dollar’s dominance even without its own currency.

For more stories on economy & finance visit RT's business section

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