BRICS is the largest buyer of gold in 2023 as members accumulated tons of the precious metal, reported the World Gold Council. China alone purchased 225 tons of gold while Russia, India, Brazil, and South Africa came next in line. Reports suggest that BRICS could back their soon-to-be-released currency with gold to take on the US dollar.
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In addition, Russia announced on Thursday that it is now doubling its accumulation of gold and local currencies moving forward. The country’s Finance Minister Anton Siluanov confirmed that they will double the acquisition of both gold and foreign currencies. The gold and foreign currency accumulation will start from April 5 to May 7, 2024.
The development comes at a time when BRICS is looking to stop using the US dollar for cross-border transactions. Read here to know how many sectors in the US will be affected if BRICS ditches the dollar for trade.
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BRICS: Russia Doubles Gold, Local Currency Accumulation To Challenge US Dollar
BRICS member Russia is set to buy 235.3 billion Rubles, which is equivalent to $2.6 billion worth of gold and foreign currencies in a day. The Ministry said that they will “buy the equivalent of 235.3 billion rubles ($2.6 billion), or 11.2 billion rubles per day of foreign currency and gold”.
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The move will also help Russia to bypass US sanctions and keep its economy afloat without any drastic hindrance. Additionally, reducing the US dollar by accumulating gold and foreign currencies will keep the country safe from financial risks. Hoarding the US dollar in reserves poses a threat as the American economy has a debt of $34.4 trillion.
A downfall in the US economy will affect BRICS countries and pull their economies down. Therefore, BRICS country Russia is playing safe by giving prominence to gold and local currencies and not the US dollar.