Ella 
The BRICS’ attempt to de-dollarize the world economy is another manifestation of the fragmentation of trade networks.
According to the Bank for International Settlements (BIS) and the Society for Worldwide Interbank Financial Telecommunication (SWIFT), 80% to 90% of global cross-border transactions use the U.S. dollar.
The main motivation of the BRICS countries to de-dollarize the world is to circumvent threats such as trade sanctions and seizure of foreign assets by Western governments. Since the U.S. dollar is widely used around the world, these measures are easier to implement and more damaging to the target country.
The implementation of high interest rates in the United States also contributed to de-dollarization
The threat of sanctions is not the only motivation for BRICS countries wanting to decouple from the dollar. The recent implementation of high interest rates in Western countries has provided another stimulus.
Many companies in emerging markets issue U.S. dollar-denominated bonds because of the U.S. dollar’s dominance in trade and financial markets. For example, it is estimated that about half of China’s and India’s foreign debt is denominated in U.S. dollars. The Carnegie Endowment for International Peace (CEIP), a Washington-based consultancy, believes that the same problem exists in countries such as Ethiopia and Argentina, as well as many other emerging market countries.
Therefore, higher U.S. interest rates significantly increase the cost of servicing these debts. Higher borrowing costs will also make trade finance, on which global trade relies heavily, more expensive.
High U.S. interest rates also strengthen the U.S. dollar’s currency position, as investors tend to put their money where they can get high returns. This further exacerbates debt servicing costs for dollar-denominated debt.
This is especially true for emerging market creditors whose currencies have fallen in value.
