After China's G7 Challenge, BRICS Bank Eyes Cutting Dollar Reliance With South African, Brazilian Currency Loans
Portfolio Pulse from Ramakrishnan M
The New Development Bank (NDB), established by the BRICS nations, plans to issue loans in South African rand and Brazilian real, aiming to reduce reliance on the U.S. dollar. This move aligns with the BRICS nations' objective to offer alternatives to the dollar in international trade and finance. The announcement comes after China's call for emerging economies to challenge the dominance of Western G7 nations. Following the news, the U.S. dollar index, tracked by the Invesco DB USD Index Bullish Fund ETF (UUP), fell by 0.11%.
August 22, 2023 | 9:42 am
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The Invesco DB USD Index Bullish Fund ETF (UUP), which tracks the U.S. dollar index, fell by 0.11% following the announcement by the New Development Bank to issue loans in South African rand and Brazilian real.
The New Development Bank's move to issue loans in South African rand and Brazilian real is a strategic initiative to reduce reliance on the U.S. dollar. This could potentially weaken the U.S. dollar, which is why the U.S. dollar index, tracked by UUP, fell by 0.11%. Given that UUP directly tracks the U.S. dollar index, any significant changes in the U.S. dollar's strength can directly impact UUP's performance.
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