China, Russia, and other members of the BRICS group of nations are not currently working on developing an alternative to the US dollar, according to a statement made by India’s foreign minister, S. Jaishankar. The BRICS group consists of Brazil, Russia, India, China, and South Africa. Jaishankar emphasized that there is no plan to create a BRICS currency for trade and investments.
Speaking at the BRICS meeting, Jaishankar stated, “On what we will discuss at the BRICS meeting, we’ll have to see because there are many other issues – but there is no idea of a BRICS currency.” He also mentioned that currencies will remain a national issue for the foreseeable future.
The statement comes in the wake of increased efforts by both China and Russia to promote de-dollarization, which aims to reduce reliance on the US dollar in international trade. The dominant position of the dollar in global trade gives the United States significant economic leverage. For example, it enabled the US to freeze half of Russia’s foreign currency reserves and ban its largest banks from the SWIFT international payments system following the conflict with Ukraine.
China has been advocating for settling commodities contracts using its currency, the renminbi, rather than the US dollar. Russian President Vladimir Putin previously expressed readiness to work with fair partners, including BRICS members, to establish a new reserve currency based on a basket of currencies that would include the Brazilian real, Indian rupee, Chinese yuan, Russian ruble, and South African rand.
The leaders of Brazil and South Africa also voiced concerns about the dominance of the US dollar. South African President Cyril Ramaphosa stated that currencies would be on the agenda when the BRICS group convenes in Johannesburg in August.
De-dollarization efforts seek to lessen the impact of US economic influence and currency volatility on BRICS nations. However, Jaishankar’s recent statement suggests that an alternative currency within the BRICS group is not currently being pursued.
In conclusion, while China and Russia have been actively promoting de-dollarization, the idea of a BRICS currency as an alternative to the US dollar is not being actively pursued. Currencies will continue to be a national matter, according to India’s foreign minister. The issue of reducing reliance on the US dollar will likely be discussed among the BRICS members at their upcoming meeting in Johannesburg.
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