- BRICS nations, notably China, Brazil, and new member Saudi Arabia, offloaded $17.4 billion worth of U.S. treasuries in September 2023.
- The ongoing shift away from U.S. treasuries by BRICS countries has led to increased uncertainty surrounding the U.S. dollar’s dominance.
In light of recent developments from the BRICS and the U.S. Treasury Department update, there’s been a significant move by BRICS nations, including China, Brazil, and the latest member, Saudi Arabia. Their combined offloading of U.S. treasuries has put the global financial markets on edge.
China, as the predominant actor in this situation, reduced its holdings of U.S. treasuries by a whopping $13.6 billion in September, causing their reserves to decline from $835.4 billion to $821.8 billion in just a month’s time.
Brazil and Saudi Arabia Follow Suit
Brazil, another major player, wasn’t far behind, disposing of $2.7 billion of U.S. treasuries. This significant move resulted in its reserves plummeting from $227.4 billion to $224.7 billion. Saudi Arabia, the new entrant to the BRICS alliance, sold off $1.1 billion of its U.S. treasury holdings. This decision saw the Kingdom’s assets dwindle from $109.2 billion to $108.1 billion.
Cumulative Impact on U.S. Dollar
It’s vital to comprehend the broader picture. In 2023 alone, the collective BRICS bloc jettisoned a staggering $123 billion in U.S. Treasuries. This massive move isn’t confined to these three countries alone. Other BRICS members, including India and the UAE, have also shed U.S. government bonds this year. With India being scrutinized for heavy selling of the U.S. dollar in forex markets, and Japan also allegedly strategizing to defend its currency against the USD, the impact on the U.S. dollar’s supremacy is undeniable.