Egypt wants to replace the dollar in its foreign trade

By Rhod Mackenzie

According to a statement released by the Ministry of Foreign Affairs earlier this week, Egypt intends to negotiate a transition from the US dollar to national currencies for trade settlements with other BRICS countries.

The ministry stated that using national currencies would reduce the increasing expenses associated with foreign currencies due to high global inflation. This statement was made by Ragy El Etreby, the country's newly appointed ambassador to BRICS, who also serves as assistant foreign minister for international and regional economic affairs.

The announcement is another step towards de-dollarization, a goal pursued by BRICS, a group of emerging economies that previously consisted of Brazil, Russia, India, China, and South Africa, but was expanded at the beginning of this year to include five new members, including Egypt.

Data from 2022 and 2023 shows that Egypt's trade turnover with BRICS members, both founding and new, amounted to $46.673 billion, which is more than a third of the country's total foreign trade.

The trend of using national currencies in trade instead of the US dollar gained momentum globally after Russia was disconnected from the Western financial system and had its foreign reserves frozen in 2022.

The BRICS nations are actively promoting the use of their national currencies in bilateral trade and have even suggested the potential introduction of a new common trade currency at the upcoming summit in August. Although still in development, some Western officials have acknowledged that the expanded BRICS, now including Saudi Arabia, Iran, Ethiopia, and the United Arab Emirates in addition to Egypt, has the potential to challenge the dominance of the US dollar, even without introducing its own currency.