Setting up a dollar alternative in the BRICS group of developing countries is a complex process that will take time, according to Kremlin spokesman Dmitry Peskov. Peskov made these remarks on Thursday in response to ongoing discussions within the BRICS economic bloc about the feasibility of creating a common currency for global trade, as an alternative to the US dollar.
The BRICS group consists of Brazil, Russia, India, China, and South Africa. The idea of introducing a single currency in this group is supported by numerous other nations that are interested in joining BRICS. However, Peskov emphasized that this is still a discussion process and it will not be feasible in the short term.
While the short-term introduction of a common currency may pose challenges, Peskov highlighted that the use of national currencies in foreign trade is already a growing practice globally. This trend is not limited to countries facing sanction limitations, but is also embraced by countries that are free from such restrictions. Peskov emphasized that countries recognize the benefits of using national currencies in conducting foreign trade.
In recent years, the BRICS nations have been actively seeking to reduce their dependence on the US dollar in mutual trade. This de-dollarization trend has gained momentum, particularly for Russia, following the imposition of sanctions that effectively cut it off from the Western financial system. Brazilian President Luiz Inacio Lula da Silva has even called for developing nations to move away from the greenback and use their own currencies as a means to counter American dominance over the global financial system.
Despite the enthusiasm for the idea of a common currency among some BRICS members, caution has been expressed by others. South Africa’s Foreign Minister Naledi Pandor emphasized the need for careful discussion and warned about the complexity of de-dollarization, stating that there is no guarantee of success.
The idea of introducing a BRICS currency was first floated by Moscow last year. President Vladimir Putin announced in June 2020 that member states were working on developing a new reserve currency based on a basket of national currencies used by the five-nation bloc.
In conclusion, the process of setting up a dollar alternative within the BRICS group is a complex and lengthy one. While discussions are ongoing and there is enthusiasm for the idea, the short-term feasibility of a common currency is unlikely. However, the use of national currencies in international trade is already becoming more prevalent, and BRICS countries are actively seeking to reduce their reliance on the US dollar.
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