In a recent statement, Russia indicated that the creation of a unified currency for the BRICS group of nations is unlikely in the near future. However, the country emphasized the increasing momentum of de-dollarization efforts worldwide.
The BRICS alliance, comprising Brazil, Russia, India, China, and South Africa, has long been exploring the possibility of establishing a common currency as a means to enhance economic cooperation and reduce dependence on the US dollar in international transactions. While the idea of a BRICS currency unlikely in the near future has garnered interest and discussions over the years, the practical challenges involved in its implementation have proved to be significant obstacles.
BRICS Currency Prospects and the Global De-Dollarization Trend
As the BRICS leaders’ summit approaches, the focus intensifies on two crucial topics: de-dollarization and the potential realization of a unified currency within the BRICS bloc. Comprising Brazil, Russia, India, China, and South Africa, these nations will convene in Johannesburg from August 22 to 24 for the summit. The discussions during the meeting are expected to centre around the feasibility of establishing a common BRICS currency and the growing trend of de-dollarization worldwide.
According to a report by the Russian state-owned news agency Ria Novosti (translated by Google’s AI program), Dmitry Peskov, the Press Secretary of the President of the Russian Federation, revealed on Thursday that experts are currently engaged in discussions about the potential and practicality of implementing a unified currency within the BRICS group. “This is an ongoing process of deliberation, and it is evident that it will take time to reach a consensus,” he stated. The Kremlin spokesperson further characterized the talks as follows:
“In the near future, it is unlikely that this will be feasible, but the use of national currencies is already a reality that is growing on a global scale, and this practice is not only used by countries that face sanctions but also by those that do not face them.”
De-Dollarization Gains Momentum: Growing Preference for National Currencies
“The global de-dollarization process is steadily advancing, and numerous countries are increasingly moving towards utilizing their national currencies,” he emphasized.
Amidst the anticipation of the upcoming BRICS summit, the topic of a common currency within the economic bloc has been a subject of debate. While Russia’s deputy prime minister hinted that the issue could be discussed during the summit, South Africa’s BRICS relations diplomat, Anil Sooklal, firmly stated that there had been no such discussion and that a BRICS currency is not on the agenda. Leslie Maasdorp, vice president and chief financial officer of the New Development Bank (BRICS Bank), also clarified that there are no immediate plans to introduce a currency that would rival the US dollar.
Recent rumours suggesting a gold-backed BRICS currency have sparked interest, BRICS currency is unlikely in the near future, with some speculating that it could potentially challenge the dominance of the US dollar on the global stage. However, obstacles stand in the way of such a development. For instance, the governor of Russia’s central bank has warned that the creation of a BRICS currency would necessitate the consent of multiple parties, indicating that significant challenges lie ahead in realizing this idea.
Over 40 nations have expressed keen interest in joining the BRICS alliance, and 22 countries have submitted formal applications. South Africa has extended an invitation to 69 leaders for the upcoming summit, including all African heads of state and prominent leaders from significant Global South organizations. No invitations have been extended to Western countries, as confirmed by Sooklal.
The prospect of a common BRICS currency remains uncertain as divergent views persist among member nations. De-dollarization, however, continues to gain momentum globally, with many countries shifting towards the use of their national currencies in international transactions. The forthcoming BRICS summit will undoubtedly shed further light on these critical economic discussions, shaping the future landscape of international finance and cooperation.
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