RIC to BRICS: The evolution from the RIC (Russia, India, China) to the expanded BRICS bloc, now including Brazil, South Africa, Saudi Arabia, the UAE, Egypt, and Iran, reflects a strategic push by emerging economies to challenge the dominance of the US dollar in global finance. The bloc commands significant weight in trade and monetary affairs, representing nearly half of the world’s population and over 40% of global GDP.
In the current scenario, when the whole world is busy finding a solution to Trump’s tariffs, fueling the process of dedollarisation or curtailing the dependence on the US dollar in the global merchandise trade is a fast-emerging tool to insulate their respective economies from the reciprocal US tariffs. According to experts, BRICS member countries are pursuing de-dollarisation, local currency settlements, and discussions of a shared reserve currency. This has led to the emergence of R-Block in the Forex market, where countries whose currency names begin with R (Russian Ruble, Indian Rupee, Chinese Renminbi, Brazilian Real, South African Rand, Iranian Rial, etc.), are leading the charge against the US dollar.
Immediate goal for R-Block currencies
Highlighting the challenges involved in dedollarisation for the R-Block, Seema Srivastava, Senior Research Analyst at SMC Global Securities, said, “The greenback accounts for 90% of forex transactions and 85% of derivatives trade, underpinned by deep liquidity, institutional strength, and global trust advantages that BRICS lacks. Structural hurdles include political differences, currency convertibility limits, and the absence of a unified financial system.
In the near term, BRICS efforts are more likely to foster a multipolar forex order than replace the dollar. For India, this could mean greater currency stability, lower imported inflation, and improved capital flow predictability, supporting equity re-rating over time.”
Counter for Trump’s tariffs
On what BRICS member countries have achieved in containing Trump’s tariffs and how R-Block can be a good solution for a balanced global trade system, Gaurav Goel, Founder & Director at Fynocrat Technologies, said, “BRICS is not creating a new single currency. Instead, it promotes using national currencies such as the Real, Ruble, Rupee, Renminbi, and Rand for member trade. This may not immediately overthrow the dollar but reduces its supremacy, especially in commodities and energy trade. The US dollar remains the strongest currency in the forex market, but BRICS is building a parallel system that weakens its monopoly. The R Block may not topple the dollar yet, but it steadily moves the world toward a more balanced and multipolar currency order.”
R-Block: What SWOT Analysis says
Speaking on what SWOT (Strength, Weakness, Opportunity and Threat) Analysis of R-Block signals, Ross Maxwell, Global Strategy Lead at VT Markets, said, “The Chinese Renminbi is the strongest candidate, yet capital controls and issues with converting restrict its rise. India is encouraging Rupee-based settlements, and its fast-growing economy helps with its credibility, but the rupee’s volatility and limited global demand are obstacles it faces. Brazil’s real has weight regionally but is highly resource-dependent and volatile, while Russia’s ruble has obvious issues with the ongoing sanctions.”
Ross Maxwell of VT Markets said fragmentation is a significant challenge for the R-Block. The currencies lack a unified system, scale, or coordinated financial infrastructure. Global investors remain cautious due to political risk, weaker legal frameworks, and restrictions on capital mobility.
How to strengthen R-Block
Seema Srivastava of SMC Global Securities said how to cement the position of R-Block currency in the Forex market, “BRICS is actively pursuing de-dollarisation through BRICS Pay, local currency settlements, and discussions of a shared reserve currency. One proposal envisions a synthetic unit of account, modelled on the IMF’s SDR, backed by a basket of currencies such as the yuan, rupee, ruble, and real. The goal is to reduce exposure to dollar volatility and US monetary policy, thereby strengthening financial sovereignty.”
Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
