Latest news with #NiltonDavid
Business Insider
22-05-2025
- Business
- Business Insider
BRICS bid to dethrone the dollar within a decade may not materialize
Brazil's central bank has expressed doubt about the likelihood of BRICS nations displacing the U.S. dollar as the dominant global currency within the next decade. Brazil's central bank expresses skepticism about BRICS replacing the U.S. dollar as the dominant global currency Analysts note growing pressures, such as trade tensions and sanctions, prompting calls within BRICS for financial sovereignty. Despite member states, such as Russia and China, advocating for alternatives, Brazil emphasizes pragmatic steps over aggressive monetary shifts. Monetary Policy Director in Brazil's Central Bank, Nilton David, stated recently that there is no realistic prospect of emerging economies within the BRICS group building markets large enough to challenge the dollar's dominance over the next 10 years David, while speaking during a central bank webcast, said despite their growing economic clout, there is no realistic scenario in which the BRICS nations could build financial systems or markets large enough to rival the dollar's global influence. 'There is not a meaningful stock of BRICS-denominated assets that could offset the dollar at the moment,' David noted. 'I don't think that will change over the coming decade.' His remarks come amid ongoing discussions within the BRICS bloc about long-term de-dollarization and the potential creation of alternative currency frameworks to support intra-bloc trade. While David acknowledged that alternative payment tools could help facilitate bilateral trade deals, he emphasized that such mechanisms remain far from sufficient to challenge the dollar's entrenched position in the global financial system. Reuters reports that Brazil's position highlights a pragmatic view within the bloc's leadership, even as member states like Russia and China continue to push for financial sovereignty and a multipolar currency landscape. BRICS long-term monetary goals The long-term monetary goals of the BRICS bloc comprising Brazil, Russia, India, China, and South Africa, with new members such as Egypt, Iran, Ethiopia, and the UAE joining in 2024 revolve around reducing dependence on the U.S. dollar and promoting a more multipolar global financial system. Central to this ambition is the discussion of a potential BRICS currency, part of a broader de-dollarization strategy aimed at replacing the dollar as the dominant medium for international trade and financial transactions. These efforts have gained momentum in response to the U.S.-China trade war and the imposition of U.S. sanctions on both China and Russia, which have fueled calls within the bloc for financial sovereignty and protection from Western monetary influence. The initiative has drawn sharp criticism from the United States. President Donald Trump vowed to impose strict sanctions on any country or entity that supports agreements designed to undermine the dollar's global role. ' The idea that the BRICS countries are trying to move away from the dollar, while we stand by and watch, is OVER, ' Trump wrote on Truth Social. An earlier Reuters report had already highlighted Brazil's cautious stanc e toward aggressive de-dollarization as it assumed the BRICS presidency. Under Brazil's leadership, the focus has shifted toward practical steps such as linking payment infrastructures and exploring blockchain protocols endorsed by global regulatory bodies like the Bank for International Settlements.
TimesLIVE
20-05-2025
- Business
- TimesLIVE
No Brics asset pile big enough to rival dollar: Brazil central bank director
Brazil's central bank does not see any realistic prospect of emerging nations in the Brics group creating markets large enough to topple the US dollar's dominance in the next 10 years, monetary policy director Nilton David said on Monday. There is not a meaningful stock of Brics-denominated assets that could offset the dollar now, David told a central bank webcast. 'I don't think that will change over the coming decade.' The director acknowledged alternative settlement tools could gain traction and help boost bilateral trade deals, but this was nowhere near enough to dislodge the dollar in any visible horizon. The Brics acronym refers to the five major emerging economies of Brazil, Russia, India, China and South Africa, which have been working together to address global issues. The group recently added six other members. Reuters reported in February Brazil's presidency of Brics this year would shelve talk of a common currency, focusing instead on ways to trim dollar reliance, such as linking payment systems and exploring blockchain standards set by bodies such as the Bank for International Settlements. US President Donald Trump has repeatedly cautioned the Brics group — whose original members were Brazil, Russia, India and China — against attempts to challenge the supremacy of the dollar. Founded in 2009 and soon expanded to add South Africa, the group has recently included Egypt, Ethiopia, Indonesia, Iran and the UAE, making it a growing diplomatic counterweight to traditional Western powers. David also said he views bitcoin as 'a speculative currency by nature', noting Brazil's $340bn (R6.3-trillion) foreign exchange reserves remain overwhelmingly in dollars because nearly all the country's external transactions are settled in the US currency. According to the director, the central bank wants to preserve the liquidity and depth of its foreign exchange market but it acknowledges these features have side effects. David noted the Brazilian real has a 'natural' correlation with risk assets, making it more volatile. It is often the pivot for portfolio managers, he said, adding this attracts investors who hold the currency only briefly, causing demand to swing sharply.
Reuters
19-05-2025
- Business
- Reuters
No BRICS asset pile big enough to rival dollar, Brazil central bank director says
BRASILIA, May 19 (Reuters) - Brazil's central bank does not see any realistic prospect of emerging nations in the BRICS group creating markets large enough to topple the U.S. dollar's dominance within the next 10 years, monetary policy director Nilton David said on Monday. There is not a meaningful stock of BRICS-denominated assets that could offset the dollar at the moment, David told a central bank webcast. "I don't think that will change over the coming decade," he added. The director acknowledged that alternative settlement tools could gain traction and help boost bilateral trade deals, but nowhere near enough to dislodge the dollar in any visible horizon. The BRICS acronym refers to the five major emerging economies of Brazil, Russia, India, China and South Africa, which have been working together to address global issues. The group recently added six other members. Reuters reported in February that Brazil's presidency of BRICS this year would shelve talk of a common currency, focusing instead on ways to trim dollar reliance, such as linking payment systems and exploring blockchain standards set by bodies like the Bank for International Settlements. U.S. President Donald Trump has repeatedly cautioned the BRICS group - whose original members were Brazil, Russia, India and China - against attempts to challenge the supremacy of the dollar. Founded in 2009 and soon expanded to add South Africa, the group has recently included Egypt, Ethiopia, Indonesia, Iran, and the United Arab Emirates, making it a growing diplomatic counterweight to traditional Western powers. David also said he views bitcoin as "a speculative currency by nature," noting that Brazil's $340 billion foreign-exchange reserves remain overwhelmingly in dollars because nearly all of the country's external transactions are settled in the U.S. currency. According to the director, the central bank wants to preserve the liquidity and depth of its foreign-exchange market but it acknowledges that these features have side effects. David noted that the Brazilian real has a "natural" correlation with risk assets, making it more volatile. It is often the pivot for portfolio managers, he said, adding that this attracts investors who hold the currency only briefly, causing demand to swing sharply.
Reuters
31-03-2025
- Business
- Reuters
Brazil central bank sees unanchored inflation expectations due to fiscal concerns
BRASILIA, March 31 (Reuters) - Brazil's central bank's monetary policy director said on Monday that policymakers "strongly believe" that long-term unachored inflation expectations are due to concerns over potential fiscal surprises. Speaking at an event hosted by Itau BBA, Nilton David also said the central bank has yet to reach a firm conclusion on the impact of new rules for payroll-deductible loans to formal workers. The Reuters Tariff Watch newsletter is your daily guide to the latest global trade and tariff news. Sign up here. One possibility, he noted, is that borrowers will refinance expensive debt with cheaper credit, while another is that they will take on new debt.
Reuters
21-02-2025
- Business
- Reuters
Brazil's central bank director says rates will be adjusted as needed after March
BRASILIA, Feb 21 (Reuters) - Brazil's central bank is convinced that monetary policy is more restrictive than normal given its guidance for an upcoming interest rate hike, and will adjust it as needed going forward, its monetary policy director, Nilton David, said on Friday. After beginning a tightening cycle in September, the central bank of Latin America's largest economy has raised its benchmark Selic rate by 275 basis points to 13.25%, and signaled late last month that it would hike it again by 100 basis points in March. "Whether it is sufficient or not, we will find out and adjust accordingly," David said at an event hosted by Bradesco BBI, adding that potential moves at the meeting in May are not currently under discussion. David stressed that policymakers will not cut borrowing costs based on perceptions of slowing economic activity, but rather on a clear assessment of what is driving inflation. He warned that the coming months will be challenging, as annual inflation readings are set to rise. "Inflation will get worse before it gets better," he said, acknowledging that market inflation expectations - currently well above the central bank's official 3% target - are unlikely to improve quickly. With the Brazilian real having gained more than 8% against the U.S. dollar since the start of the year, following a drop of more than 20% in 2024, David said the central bank cannot assume it will resolve its problems with just a few weeks of exchange rate adjustments. He also pointed out that the central bank has no attachment to any specific exchange rate level or target. David said economic activity is expected to cool down and that current monetary policy will move in that direction, but acknowledged that some economists perceive that, in response, incentives may be provided to boost the economy, counteracting the central bank's efforts. However, he emphasized that the central bank cannot raise interest rates based on hypothetical outcomes. "It doesn't seem like the most appropriate policy when you're already at restrictive interest rates," David said, echoing recent comments by central bank chief Gabriel Galipolo, who said policymakers could not act preemptively on an issue that has yet to materialize.
