Setback For De-Dollarization? No BRICS Currency Talks At South Africa Summit But 44 Nations Wish To Join The Union, Says Official

Dollar bulls could heave a sigh of relief as BRICS nations' plan to float a common currency may not come to fruition any time soon.

What Happened: The BRICS, an acronym referring to Brazil, Russia, India, China and South Africa, are meeting in Johannesburg in August 22-24 and it was rumored that group of nations could launch the common currency at the event.

South Africa's Ambassador at Large for Asia and BRICS Anil Sooklal said at a media briefing this week that the BRICS currency is not on the agenda at next month’s meeting, Reuters reported.

“What we have said and we continue to deepen is trading in local currencies and settlement in local currencies.”

Sooklal reportedly said more than 40 nations have expressed interest in joining the BRICS. Since BRICS was initially formed as BRIC in 2009 sans South Africa, the latter was the only addition to the group.

“Twenty-two countries have formally approached BRICS, an equal number of informal approaches,” Sooklal reportedly said.

See Also: How Will BRICS Currency Affect Forex Traders?

Why It's Important: The idea of a common BRICS currency was mooted by member nations, with Brazil and Russia leading the drive. The rationale behind such a move was to counter the domination of the Western world in global finance. Western sanctions imposed on Russia following its war with Ukraine accelerated discussions on the topic.

Although the process is a complex move requiring fiscal, banking and macroeconomic union, interest in a common currency has been on the rise.

The U.S. dollar accounted for about 58% of global forex reserve and 88% of international transactions happen in greenback, a Fortune report said. De-dollarization or a move away from the dollar, therefore, may not be an easy transition. Brazil, Russia and China have begun to increase the share of non-dollar currencies in their cross-border transactions. The central banks have also expressed intent to convert their dollar reserves into gold.

Read Next: BRICS Currency Rising? 19 Countries Desperate To Join The Powerhouse Group

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