The foreign minister of South Africa has stated that the BRICS group of nations will explore the possibility of implementing a shared currency, Bloomberg reported. However, she highlighted the importance of avoiding impulsive judgments and taking a measured approach.
BRICS bloc leaders to discuss the introduction of common currency at upcoming South Africa summit
Due to the appreciation of the US dollar and its negative impact on emerging markets, there have been calls for alternative currencies for global trade. One option suggested is for the BRICS alliance to introduce its own currency, consisting of Brazil, Russia, India, China, and South Africa. This matter is expected to be discussed during the upcoming summit of BRICS leaders in Johannesburg on August 22.
“I don’t like preempting BRICS leaders’ discussions,” South African Minister of International Relations Naledi Pandor said in an interview in Cape Town on Tuesday.
“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.”
With a population exceeding 40% of the world’s total and almost one-third of the global economic output, the BRICS alliance stands as a significant economic bloc on a global scale, according to Bloomberg. Moreover, numerous countries, including Iran and Saudi Arabia, have expressed a keen interest in joining the bloc’s ranks.
BRICS countries call for shift from US dollar dominance, while experts predict continued supremacy
BRICS nations and other countries “are saying why can’t we trade in our own currencies? Why are we committed to trading through the dollar?” Pandor said. “South Africa has an internationally traded currency. However, we hold a lot of debt in dollars so you know we have to approach this discussion responsibly.”
According to Vestact, a Johannesburg-based asset management firm, the US dollar is likely to continue its dominance as the primary global currency for the foreseeable future.
“No other country has the recognizability, stability, and economic might behind it,” it explained in a client note. “The only currency that is vaguely close to being able to replace the dollar is the euro.”
