The heavily anticipated BRICS currency is not on the agenda to be discussed at the economic bloc’s upcoming leaders’ summit, according to South Africa’s diplomat in charge of BRICS relations. He clarified that the BRICS members will focus on de-dollarization and promoting the use of national currencies in international trade instead of the U.S. dollar.
BRICS to Focus on Reducing Dollar Reliance
The topic of a common BRICS currency is not on the agenda to be discussed at the economic group’s upcoming leaders’ summit, South Africa’s diplomat in charge of BRICS relations, Anil Sooklal, reportedly said Thursday.
South Africa, being the current chair of the BRICS group, will be hosting the summit in Johannesburg on Aug. 22-24. Sooklal explained that the BRICS nations (Brazil, Russia, India, China, and South Africa) will discuss using national currencies and reducing reliance on the U.S. dollar. He was quoted by Reuters as saying:
There’s never been talk of a BRICS currency, it’s not on the agenda … What we have said and we continue to deepen is trading in local currencies and settlement in local currencies.
Recently, Russian news outlet RT claimed that the BRICS nations will announce a gold-backed common currency at the August summit. However, Leslie Maasdorp, vice president and chief financial officer of the New Development Bank, also known as the BRICS Bank, stated that the economic bloc has no immediate plan to launch a currency to compete with the U.S. dollar. Noting the distinction between de-dollarization efforts and the creation of a common BRICS currency, he stressed: “The development of anything alternative is indeed a medium to long-term ambition.”
Brazil’s President Luiz Inacio Lula da Silva and Russian Foreign Minister Sergei Lavrov have championed the concept of a common currency as the BRICS nations endeavor to counter Western dominance in global finance. This followed heavy financial sanctions the West placed on Russia after it invaded Ukraine. The U.S. and its allies have frozen about $300 billion in Russian central bank assets, prompting many countries to seek alternatives to the USD.
Regarding de-dollarization, Sooklal explained:
BRICS started a process that has been expedited as a result of the conflict, as a result of unilateral sanctions … The days of a dollar-centric world is over, that’s a reality. We have a multipolar global trading system today.
Earlier this month, India’s foreign minister emphasized that currencies would remain “very much a national issue for a long time to come.” Russia’s central bank governor also expressed similar sentiments, noting that a BRICS currency would necessitate the consent of multiple parties due to implementation challenges. Furthermore, South Africa’s central bank governor highlighted that a common currency would require the establishment of a banking union, a fiscal union, and macroeconomic convergence.
Sooklal also revealed that more than 40 countries are interested in joining the BRICS bloc, with 22 of them having already submitted formal applications. The diplomat believes that the BRICS group could expand to include more than 50 countries.
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