BRICS Considers Establishing Own Currency to Avoid US Dollar Dominance in International Trade

2023-06-04 01:14:16

Brazil, Russia, India, China and South Africa, member states of the BRICS international economic bloc, are considering establishing their own currencies to avoid the US dollar in international trade.

Mohammed Saqib, secretary-general of the India-China Economic and Cultural Council, told Sputnik that the introduction of a BRICS currency “will require overcoming significant challenges to build trust and acceptance over time,” noting that the market is already dominated by established currencies. such as the US dollar, the euro and the yen.

“However, many countries are frustrated with the hegemony of the dollar and wish they had another option. Therefore, the acceptance of the BRICS currency would not be a problem,” he said.

According to Saqib, this potential BRICS currency might become an alternative reserve currency that would help mitigate “possible economic sanctions, vulnerability and dependence on US monetary policy.”

To carry out this vision, the BRICS members will have to face a series of challenges, such as their divergent economic structures, income disparities and geopolitical differences, Saqib noted.

“It will require tremendous work with a very high level of political will, cooperation, coordination and harmonization among members, which seems difficult but is quite possible. Things will be easier if more countries join BRICS and members keep their bilateral problems outside,” he added.

That said, the BRICS countries “have already shown a commitment to enhance their economic cooperation and challenge the existing global financial order,” with initiatives from the bloc like the New Development Bank and the Contingent Reserve Arrangement indicating a “willingness to explore mechanisms alternative financiers” and “reduce dependency on traditional global institutions.

Despite the challenges its creation would entail, this still hypothetical BRICS currency would help improve economic integration and cooperation among the bloc’s countries, allowing them to “coordinate their monetary policies more effectively,” Saqib remarked.

He also suggested that such a move would result in a “change in the world’s reserve currency and less reliance on the US dollar for international transactions.”

With Washington actively managing the US dollar as a political instrument, the BRICS countries announced earlier this year that they may soon consider establishing their own currency, in an attempt to ward off the whims of the White House.

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