BRICS: India Asks Ethiopia to Ditch US Dollar, Trade In Local Currency
the US dollar and settle trade in local currency. Ethiopia is also a new member of BRICS as the alliance inducted the country during the 15th summit in August. The summit in Johannesburg inducted six new countries Saudi Arabia, the UAE, Argentina, Egypt, Iran, and Ethiopia. Except for Argentina, all the other nations are oil-producing countries that export millions of barrels across the globe every year.
Ethiopia is the fastest-growing economy in Africa and will also allow India’s UPI payment system to enter the continent. The top 3 Indian companies have invested $5 billion in Ethiopia in sectors like agriculture, engineering, water management, pharmaceuticals, and healthcare.
BRICS: India Urges Ethiopia To Use Local Currency For Payment & Not US Dollar
The new BRICS member Ethiopia has now been asked to explore local currencies for payments and not the US dollar. India urged Ethiopia to look at possibilities to settle bilateral trade in local currencies and cut ties with the US dollar. The move will help boost the native economies of both countries and make their local currencies stronger.
Both India and Ethiopia expeditiously address issues regarding trade that mutually benefit their economies. Cross-border transactions in the US dollar could take a back seat if the BRICS members agree to settle trade in local currencies. The development could further weaken the US dollar and send it on a path of decline.
The bilateral trade between BRICS members India and Ethiopia currently stands at $642.59 million. India is the second largest exporter to Ethiopia and asking them to settle trade in local currencies could hamper the US dollar’s prospects.
“The Indian side urged Ethiopia to explore the possibility of settlement of trade transactions in local currency which will help boost bilateral trade and conserve foreign exchange,” the commerce ministry said.
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