BRICS Summit Wraps Up With Lack Of Consensus On New Currency, Divergent Statements On De-Dollarization

The BRICS coalition of Brazil, Russia, India, China, and South Africa has concluded its latest summit in South Africa, adding six nations to its fold but without introducing a new currency to challenge the US dollar. Instead, members held contradictory views about de-dollarization, Business Insider reported.

Brazil’s President, Luiz Inacio Lula da Silva, a vocal proponent for alternative trade settlement currencies, called for a common BRICS currency. Russian President Vladimir Putin also reiterated his support for increasing local currencies for trade.

However, Hardeep Singh Puri, India’s oil and gas minister, pointed out that it might be difficult to overturn long-established payment arrangements. Meanwhile, China’s President Xi Jinping advocated for reforms in the global financial and monetary systems.

South Africa’s finance minister, Enoch Godongwana, dismissed the possibility of a BRICS currency, stating that it would entail setting up a central bank and consequently losing independence on monetary policies.

Jim O’Neill, the economist who first named the BRICS bloc, criticized the idea of a common currency as “ridiculous”, adding that the political differences between China and India posed a significant obstacle to de-dollarization.

While discussions around a dollar alternative were ongoing, SWIFT data demonstrated the U.S. dollar was used for a record 46% of foreign exchange payments in July via the communications system. 

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