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4 May, 2024 18:54

BRICS should be ready for dollar collapse – Russian IMF rep

The international group could create an alternative currency based on their national legal tenders, according to Alexey Mozhin
BRICS should be ready for dollar collapse – Russian IMF rep

The BRICS group of nations could offer an alternative currency in the event of a collapse of the dollar and the international monetary system, according to Russia’s executive director at the International Monetary Fund (IMF), Alexey Mozhin.

In an interview with RIA Novosti published on Friday, the expert noted that the shortcomings of the current financial system are becoming more apparent and that many publications have started to mention BRICS “in the context of the fact that this association can offer an alternative.” 

Mozhin explained that it is possible for the economic bloc’s member countries to create a currency that would be “built on a basket of currencies of the five member countries,” which would include the Chinese yuan, Indian rupee, Russian ruble, Brazilian real, and the South African rand.

“Such a proposal is being discussed. In the event of the collapse of the dollar and the international monetary system, it will be necessary to turn the said BRICS accounting unit into a real currency, backed by exchange goods,” the director told the outlet.

Earlier this year, during a meeting of BRICS finance ministers and heads of central banks, representatives of its member states expressed support for moving away from the dollar and for trading in national currencies instead.

Russia’s Deputy Minister of Finance, Ivan Chebeskov, said at the time that “most countries said that payments in national currencies are what the BRICS countries need. We are already a large BRICS family, consisting of ten countries. Most countries supported the need to build new payment mechanisms and shared their experience developing central bank digital currencies, building new platforms, and participating in pilots of various platforms.”

Chebeskov surmised that the majority of the participants of February’s BRICS forum supported boosting bilateral trade and strengthening economic ties by moving to independent settlement mechanisms in national currencies.

Meanwhile, according to a recent Bloomberg report, economic aides to former US President Donald Trump, who is seeking re-election this year, are currently looking at ways to punish countries that choose to shift away from using the US dollar.

As reported by the outlet, Trump’s team is discussing penalties against both allies and adversaries who seek to divert their trade from the greenback to other currencies, with countermeasures including export controls, currency manipulation changes, and tariffs.

The global trend towards de-dollarization comes after Russia was cut off from the Western financial system following the outbreak of the Ukraine conflict in 2022. Additionally, financial experts have raised concerns that the seizure of Russia’s foreign assets, and Western plans to confiscate these, could further spur the trend.

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