With Brazil liquidating its massive holdings of US Treasury bonds and increasing its gold purchases, the BRICS countries' "de-dollarization" strategy is once again attracting market attention. This is seen as a move that should be interpreted within the context of a shift in the global monetary order, rather than a simple asset adjustment.
The Brazilian central bank has reportedly reduced its holdings of US Treasury securities to approximately $61 billion (approximately 80 trillion won) in recent years. Over the same period, its gold holdings have increased significantly. This effectively reduces the share of dollar-denominated assets in its foreign exchange reserves and shifts the focus to real assets like gold.
This shift isn't unique to Brazil. The BRICS countries, led by Russia and China, have been gradually reducing their holdings of US Treasury bonds for several years now. This is the result of a structural shift toward dollar assets, driven by factors such as the growing US fiscal deficit, geopolitical risks, and the possibility of financial sanctions.
In this environment, gold is once again emerging as a "central bank asset." The price of gold has soared to near-record highs in the international gold market, fueled by continued purchases by central banks around the world. Brazil's decision, too, appears to be a strategic decision, driven by medium- to long-term stability and monetary sovereignty, rather than short-term profits.
The market is linking this move to the BRICS's ongoing discussions on a common payment system and the expansion of the use of regional currencies. Analysts say this is significant, as the policy direction aimed at reducing dependence on the dollar is leading to tangible changes in asset management.
However, there is also a prevailing view that the likelihood of the dollar system being shaken in the short term is limited. Dollar assets still account for more than half of global foreign exchange reserves, and US Treasury bonds offer few liquidity and reliability alternatives. Nevertheless, the very fact that central banks are opting for "diversification" sends a clear signal to the market.
Brazil's reduction in its holdings of US Treasury bonds and increased gold purchases are not simply portfolio adjustments, but rather a cautious distancing from the dollar-centric financial order. If these movements by emerging countries, particularly the BRICS, continue, the balance of global asset markets is likely to gradually shift.
