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BRICS Moves Towards National Currencies: Insights from Brazil's Ambassador
🌍 BRICS is intensifying its efforts to move away from the U.S. dollar in favor of national currencies. Brazil’s Ambassador to India, Kenneth Felix Haczynski da Nobrega, recently clarified that the bloc will not introduce a common currency during its 2025 summit in Rio de Janeiro.
💬 In an interview with The Hindu, Nobrega stated,
To speak of a BRICS currency… that is something that does not exist, and we are not envisioning creating a BRICS currency in the foreseeable future.
He emphasized that BRICS is encouraging its members to use local currencies for trade on a voluntary basis.
🗓 The upcoming summit will see participation from new members like Egypt, Ethiopia, Iran, the UAE, and Indonesia. While Indian Prime Minister Narendra Modi will be present, the leaders of Russia and China will be absent.
💡 The concept of a common BRICS currency emerged from the bloc’s aim to reduce dependence on the U.S. dollar and enhance financial autonomy. Brazil advocated for this idea to boost intra-bloc trade, while Russia viewed it as a way to circumvent Western sanctions. However, differences among members regarding economic diversity and monetary policy control led to skepticism, particularly from India and South Africa. Consequently, the bloc has shifted its focus towards promoting local currency trade and alternative payment systems.
🔍 With increasing interest in currency diversification in the Global South, BRICS is exploring localized payment systems without suggesting major changes to the global monetary order. Nobrega pointed out that this approach is similar to existing arrangements within the MERCOSUR trade bloc in South America, where local currencies have been utilized for over 25 years.
💬 In an interview with The Hindu, Nobrega stated,
To speak of a BRICS currency… that is something that does not exist, and we are not envisioning creating a BRICS currency in the foreseeable future.
He emphasized that BRICS is encouraging its members to use local currencies for trade on a voluntary basis.
🗓 The upcoming summit will see participation from new members like Egypt, Ethiopia, Iran, the UAE, and Indonesia. While Indian Prime Minister Narendra Modi will be present, the leaders of Russia and China will be absent.
💡 The concept of a common BRICS currency emerged from the bloc’s aim to reduce dependence on the U.S. dollar and enhance financial autonomy. Brazil advocated for this idea to boost intra-bloc trade, while Russia viewed it as a way to circumvent Western sanctions. However, differences among members regarding economic diversity and monetary policy control led to skepticism, particularly from India and South Africa. Consequently, the bloc has shifted its focus towards promoting local currency trade and alternative payment systems.
🔍 With increasing interest in currency diversification in the Global South, BRICS is exploring localized payment systems without suggesting major changes to the global monetary order. Nobrega pointed out that this approach is similar to existing arrangements within the MERCOSUR trade bloc in South America, where local currencies have been utilized for over 25 years.
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