BRICS to 'Discuss Properly' Introducing Common Currency at South Africa Summit

Amid a growing chorus of voices raising the need for using alternatives to the dollar in global trading, BRICS member states will debate introducing a common currency, South Africa's minister of international relations and cooperation stated.

“It’s a matter we must discuss and discuss properly... I don’t think we should always assume the idea will work, because economics is very difficult and you have to have regard to all countries, especially in a situation of low growth when you are emerging from crises," Naledi Pandor said in Cape Town on Tuesday.

The summit of the bloc, which unites the world's largest developing economies — Brazil, Russia, India, China, and South Africa — is set for August 22 in Johannesburg, South Africa. Ahead of the gathering, officials and analysts have been expanding upon the possibility of BRICS countries mulling such a new form of currency at the event. Russia's State Duma Deputy Chairman Alexander Babakov has not ruled out the possibility of a single currency emerging in BRICS, which could be secured not just by gold, but also by other groups of products, such as rare-earth elements.

"I think that at the BRICS [leaders' summit] will be announced the readiness to realize this project," Babakov said on the sidelines of the Russian-Indian Strategic Partnership for Development and Growth Business Forum in March

Indeed, many Global South countries have been eyeing an alternative to the fiat dollar system. The latter is a government currency not backed by a physical commodity like gold or silver. Washington has fine-tuned its policy of wielding the greenback as a tool of sanctions and coercion, as Russia has repeatedly warned. Restrictions on Moscow over its special military operation in Ukraine, the freezing of its Central Bank reserves, severing it from SWIFT, along with restrictions imposed on China's industries, are a glaring example of the "weaponization" of the dollar. Coupled with the US' swelling federal debt, the Federal Reserve's interest rate hikes to tame inflation, and a swathe of US bank failures, have all fed into the de-dollarization trend.

"The BRICS countries have long been working on measures to reduce the share of the dollar in mutual payments and to switch to payments in national currencies... Recently, Brazilian President Lula da Silva suggested that we consider moving toward a collective currency within the BRICS. We will participate with interest in this discussion," Russian Foreign Minister Sergey Lavrov highlighted in April.

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A number of other countries are showing keen interest in joining the economic bloc, which represents over 40% of the world’s population and accounts for close to a third of global economic output.

“What will be discussed is the expansion of BRICS and the modalities of how this will happen... Thirteen countries have formally asked to join and another six have asked informally. We are getting applications to join every day,” Anil Sooklal, South Africa’s BRICS ambassador, said earlier in the year.

Algeria made an official request to join BRICS last year, with Saudi Arabia and Iran among those countries who have also formally knocked on the door of the bloc. Other interested countries include Argentina, the United Arab Emirates, Egypt, Turkiye, Bahrain, and Indonesia.

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