a day ago
BRICS summit to focus on local currency trade
Weeks before top BRICS leaders converge in Rio de Janeiro for summit talks, envoys of leading member nations of the grouping hinted that it could focus on greater use of national currencies for trade in the face of uncertainties over Trump administration's aggressive policy on tariff.
Russian Ambassador Denis Alipov reaffirmed Moscow's strong support for trade in local currency among BRICS member nations and described the grouping as 'a serious platform for discussing joint soluti'ons to big challenges'. The summit is unlikely to make any significant progress on the proposed BRICS currency as it will need significant structural changes and reforms.
In the last few months, President Donald Trump has cautioned BRICS member nations against rolling out a BRICS currency to replace the US dollar. 'BRICS is not a counter-bloc. It is a centre of gravity for countries seeking mutual respect and non-interference,' Alipov said at a conference titled 'BRICS in Rio: Shaping an Inclusive and Sustainable World Order' that was co-organised by the Embassy of Brazil in India and Centre for Global India Insights (CGII), a leading think tank focused on global affairs.
The 17th BRICS ((Brazil, Russia, India, China, and South Africa) summit will be held in Rio de Janeiro on July 6 and 7. Brazil is hosting the summit in its capacity as the chair of the influential bloc. Prime Minister Narendra Modi, Chinese President Xi Jinping, South African President Cyril Ramaphosa and several other leaders of the member nations of the grouping are expected to attend the summit. Enhancing the use of national currencies in settling intra-BRICS trade figured prominently in discussions, with all panellists backing the proposal, which is already being implemented by BRICS countries.
However, the panellists found the idea of a BRICS common currency impractical. Besides Alipov, India's BRICS sherpa and Secretary (Economic Relations) in the Ministry of External Affairs (MEA) Dammu Ravi, Brazil's Ambassador to India Kenneth Felix Haczynski da Nobrega, Indonesia Ambassador Ina Hagniningtyas Krisnamurthi and Egypt's envoy Kamel Zayed Kamel Galal attended the conference.
In his remarks, Ravi clarified that discussions around a BRICS common currency are still at a very early stage. 'Today, for now, we are only looking at trade settlement in national currencies. Harmonisation of fiscal and monetary policies is very, very difficult to achieve, he said.
Nobrega and Ravi both reiterated that a common currency would require far deeper policy harmonisation -- something the EU struggled with despite far more economic alignment.
