BRICS is looking at creating a new currency in the global markets to settle international trade among member countries. The alliance wants to end dependency on the US dollar and give prominence to the soon-to-be-released currency. The bloc of nine countries wants their native currencies to strengthen as keeping the US dollar in reserve poses a risk to their growth.
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The uncontrolled $34.4 trillion debt is making developing countries worried as it could leave a negative impact on their economies. Central Banks are now accumulating gold instead of the US dollar to stay away from the USD currency’s debt. For the uninitiated, BRICS countries are the largest buyers of gold accumulating tonnes of the precious metal, reported World Gold Council.
BRICS: New About The Currency
Brazilian Sherpa Mauricio Lyrio gave an update about the happenings of the BRICS currency. The Sherpa confirmed that BRICS continues working on a common currency and the topic will be discussed at the next summit. Lyrio explained that the alliance is working towards the advancement of the common currency and payment system.
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“We are working on that (new currency),” Lyrio said. He added, “The countries are discussing it under the Russian presidency, and it’s one of the topics discussed during this presidency”.
Moreover, if BRICS launches a new currency or common payment system, the US dollar will be the hardest hit. Developing countries will slowly end reliance on the US dollar and opt for the new payment system. Read here to know how many sectors in the US will be affected if BRICS ditches the dollar for trade.
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The upcoming summit is scheduled to be held in October this year in the Kazan region of Russia. The 16th BRICS summit will see the attendance of new member countries the United Arab Emirates (UAE), Egypt, Iran, and Ethiopia.