BRICS countries talk reserve currency to reduce dependence on dollar, euro

 

The reserve currency will be based on a basket of currencies from the bloc of five countries.

According to senior Russian diplomat and point person for the bloc Pavel Knyazev, the BRICS countries are working to introduce a new reserve currency to better serve their economic interests.

According to media reports, the reserve currency will be based on a basket of currencies from the five major emerging economies of Brazil, Russia, India, China and South Africa.

"The possibility and possibilities of establishing a common single currency based on a basket of currencies of the BRICS countries are being discussed," said Russian Sous Sherpa.

Analysts say the BRICS reserve currency is meant to reduce rivalry and dependence on the US dollar, the euro and the IMF's Special Drawing Rights (SDR) currency.

All BRICS members have taken steps to reduce the dollar and improve their autonomy in the global financial system.

During the 14th BRICS summit in June, Russian President Vladimir Putin announced that the five-nation bloc planned to issue a new global reserve currency. "We stand ready to work openly with all impartial partners," he said.

Putin's declaration had underscored the importance of recognizing the disparate objectives of the BRICS countries to not only facilitate intra-BRICS trade in local currencies, but also to firewall their global financial interests.

According to Knyazev, member countries are "actively studying mechanisms" to exchange financial information to develop a reliable alternative to international payments.