UAE to join India in BRICS; barrel is traded with rupees instead of USD

https://www.lemonde.fr/en/international/article/2023/08/24/i...

Especially with Iran joining it's starting to look very anti-Western.

It’s not free or easy to maintain the stability (and therefore the attractiveness) of the dollar. It costs the US a lot to do so, and it’s not clear what it gets in return anymore. For example, the option of growing exports by weakening the dollar (or more likely, the dollar weakening naturally due to a trade deficit) simply doesn’t exist for the U.S. because it runs counter to maintaining the stability of the dollar.

Essentially, the US has to rely on expensive fiscal policy and trade barriers to grow exports and a domestic production base instead of the much easier monetary policy.

But more generally, US monetary policy is highly driven by global needs more so than national needs. And the USD’s reserve status is a large part of that.

The traditional benefit for the US was always cheaper oil. But considering the U.S. is the largest producer of fossil fuels today, and further, all countries need to reduce their reliance on fossil fuels, this is a benefit that will become increasingly less relevant over the upcoming decades.

If the U.S. is lucky some other country will pick up the slack it’s been picking up all this while.

And buying oil in INR makes a lot of sense for the UAE because so much of its labor costs is paid to Indians. It would be far more efficient to just pay them in INR going forward.

That being said, it remains to be seen how successful the currency of a country which has depreciated significantly over the past decade+ against the dollar, and further, has been subject to multiple rounds of “demonetization” and other capricious govt policies, will be as an alternative reserve currency.