Title: BRICS Summit Concludes Without Unified Currency Challenge to USD Dominance
The recently concluded BRICS summit failed to yield a new currency that could challenge the dominance of the US dollar in international trade. The event, which brought together the leaders of Brazil, Russia, India, China, and South Africa, touched upon the topic of de-dollarization but did not result in a concrete plan for a common BRICS currency.
According to the latest data from SWIFT, the USD accounted for a record-breaking 46% of foreign exchange payments in July, indicating the continued reliance on the American currency in global transactions. This significant figure underscores the challenges of diversifying currency usage on a large scale.
Brazilian President Luiz Inacio Lula da Silva took the opportunity to advocate for the creation of a common currency within the BRICS group. His proposal aimed to provide an alternative to the USD and enhance financial cooperation among the member countries.
Russian President Vladimir Putin echoed Lula da Silva’s sentiments, emphasizing that de-dollarization within the BRICS bloc is “irreversible” and gaining momentum. Putin’s remarks highlighted the growing efforts by BRICS nations to reduce their reliance on the US dollar and bolster their monetary independence.
While recognizing the difficulty of altering long-standing payment arrangements, India’s oil minister, Hardeep Singh Puri, expressed a desire for the Indian rupee to become the leading global currency. Puri’s statement reflects India’s aspirations to strengthen its position on the global financial stage.
Notably, Chinese President Xi Jinping focused on promoting reforms in the world’s financial system. However, he did not directly address the establishment of a common currency within the BRICS framework.
In contrast, South Africa’s finance minister, Enoch Godongwana, dismissed the notion of a BRICS currency, citing concerns about the loss of monetary policy independence associated with such a move. Godongwana emphasized the importance of maintaining control over economic decision-making within individual BRICS nations.
Renowned economist Jim O’Neill, who coined the term BRICS, criticized the idea of a shared currency, highlighting the political differences between China and India as a significant obstacle. O’Neill’s remarks pointed out that divergent national interests among the BRICS members pose challenges to the establishment of a unified currency in the bloc.
Despite discussions around de-dollarization and the desire for increased financial cooperation, the recent BRICS summit concluded without a final decision on establishing a common currency. The challenges posed by the USD’s dominant position, as well as differing opinions among member countries, continue to shape the trajectory of currency relations within the BRICS bloc.