The BRICS Summit Ended With No New Currency
The BRICS Summit Ended With No New Currency And All 5 Members Issuing Differing And Contradictory Commentary On De-Dollarization
Huileng Tan Mon, August 28, 2023 De-dollarization was a closely watched topic amid the BRICS summit last week. But BRICS nations appear divided on the issue, as statements from the bloc's leaders indicated. The latest SWIFT data showed the USD was used for a record 46% of foreign exchange payments in July. A group of major emerging economies wrapped up a summit in South Africa last Thursday by welcoming six new members — but without a new dollar-challenging currency.
The summit of Brazil, Russia, India, China, and South Africa or BRICS nations added Saudi Arabia, Iran, Ethiopia, Egypt, Argentina, and the United Arab Emirates to its fold. It is the bloc's first expansion in 13 years as it seeks to be an alternative to Western-led groupings.
While there was talk about the bloc's possible creation of a common currency to rival the US dollar, that didn't happen – in fact, chatter from the BRICS nations on the issue was divided, pointing to different opinions that may delay any such development.
As this dollar alternative was being discussed, data from SWIFT showed the greenback was used for a record 46% of foreign exchange payments via the communications system in July.
Here's what the leaders of five BRICS members said about de-dollarization:
Brazil's President called for a common BRICS currency
"The creation of a currency for trade and investment transactions between BRICS members increases our payment options and reduces our vulnerabilities," Brazil's President Luiz Inacio Lula da Silva said at the summit's opening plenary session on Wednesday.
The Brazilian leader has been one of the most vocal proponents of alternative trade settlement currencies.
"Why can't we do trade based on our own currencies?" he said in an April state visit to China, per The Financial Times. "Who was it that decided that the dollar was the currency after the disappearance of the gold standard?"
Putin renewed his call to increase the use of local currencies for trade
"We are working to fine-tune effective mechanisms for mutual settlements and monetary and financial control," said Russian President Vladimir Putin on Tuesday.
He added that de-dedollarization within the BRICS bloc is "irreversible" and gaining pace.
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