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3 Aug, 2023 13:19

Kremlin pours cold water on BRICS single currency speculation

The process of setting up a dollar alternative is complex and will take time, according to Dmitry Peskov
Kremlin pours cold water on BRICS single currency speculation

Introducing a single currency in the BRICS group of developing countries would be difficult to do in the short term, Kremlin spokesman Dmitry Peskov said on Thursday.

The economic bloc comprising Brazil, Russia, India, China, and South Africa has been debating the feasibility of creating a common currency for global trade as an alternative to the US dollar. The idea is supported by numerous other nations that want to join BRICS.

“Certainly, expert discussions are underway about the possibility, expediency and feasibility of plans to introduce the national currency of some kind of integration processes. This is still a discussion process; it is clear that it will be protracted in time,” Peskov stated.

He, however, added that while “in the short term, this is hardly feasible, the use of national currencies is already a reality that is growing on a global scale, and this practice is resorted to not only by countries that face sanction limitations, but by those that do not.” 

According to Peskov, countries understand the benefits of this when conducting foreign trade.

The BRICS nations have been seeking to shift further away from the US dollar in mutual trade, with the de-dollarization trend gaining momentum following sanctions that effectively cut Russia off from the Western financial system.

Brazilian President Luiz Inacio Lula da Silva has stated that developing nations should move away from the greenback in favor of their own currencies in order to push back against American dominance over the global financial system.

Meanwhile, South Africa’s Foreign Minister Naledi Pandor has said that the bloc should carefully discuss the idea, warning that de-dollarization would be complex and that there would be no guarantee of success.

Moscow floated the idea of introducing a BRICS currency last year. President Vladimir Putin said last June that member states were working on developing a new reserve currency based on a basket of the national currencies used by the five-nation bloc.

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