Saudi Arabia is in talks to join the Shanghai-based New Development Bank, also known as the “BRICS bank,” according to a statement by the NDB, cited by a US media report.
“In the Middle East, we attach great importance to the Kingdom of Saudi Arabia and are currently engaged in a qualified dialogue with them,” the statement by the lender read.
Adding the country as the ninth member of the bank would strengthen Riyadh’s ties with BRICS member states, it was added.
It is hoped that as the world’s largest exporter of oil joins the bank, as it would serve to bolster its funding options, the report emphasized. The latter were singled out by Ashwani Muthoo, director general of the NDB’s independent evaluation office, as “the most important thing at the moment."
"We are struggling to mobilize resources,” he was cited as saying, adding that at its upcoming board meetings, the NDB board intended to look into alternative currencies, like China’s yuan (also referred to as renminbi), or South Africa's rand.
In 2021, the bank admitted Bangladesh, Egypt, the UAE, and Uruguay as new members. All of those countries except Uruguay officially became members upon depositing their instrument of accession. Founding member Russia holds an approximately 19 percent stake in the bank. However, amidst the Ukraine crisis last year, the bank had to put transactions in Russia on hold, citing the "unfolding uncertainties and restrictions."
But the sanctions and aforementioned restrictions that came with the NATO-Russia proxy war in Ukraine have served to hasten a dramatic global realignment, triggering renewed talk about alternatives to the dollar, which has served as a Western instrument to bully other countries into submission. Russia’s Prime Minister Mikhail Mishustin, who led a high-profile delegation to the Russia-China Business Forum recently, underscored that the NDB is conducive to defending the BRICS member states from “illegitimate sanctions from the collective West.”
A growing agglomeration of factors indicate that the dollar is on the path to losing its status as the dominant internationally-recognized store of value. Efforts are being made by more and more countries to increase the use of local currencies. A case in point are discussions by the BRICS nations (which have now surpassed the G7 in terms of overall economic power) on the creation of a common currency alternative to the dollar. Saudi Arabia, which is now preparing to join the NDB, has been expressing openness to trade in currencies besides the dollar, most notably including China’s yuan. The oil-rich kingdom’s finance minister announced this in January.
Beijing has been expanding cooperation with Riyadh in recent years on such fronts as the economy, military, and successful diplomatic teamwork - as testified to by the recent China-brokered revival of ties between Iran and Saudi Arabia. Chinese President Xi Jinping visited Saudi Arabia last year, hailing a “new era” in the countries’ ties.
Furthermore, Saudi Arabia has reportedly been considering joining BRICS. The bloc unites the world's largest developing economies — Brazil, Russia, India, China, and South Africa. Over recent time, a number of other countries have been showing keen interest in joining BRICS, which represents over 40% of the world’s population and accounts for close to a third of global economic output. Ahead of the summit of the bloc, set for August 22 in Johannesburg, South Africa, officials and analysts have been expanding upon the possibility of BRICS countries mulling such a new form of currency at the event.