BRICS members are currently divided a month before the summit in South Africa in August. The cracks within the BRICS group are growing larger as the bloc of five nations differs in ideology. While China and Russia are advancing towards the formation of a new currency, India seems to have taken a step back. India is sending mixed signals of backing out from the creation of the new BRICS currency and favoring the Rupee.
The Indian Rupee is holding strong against the U.S. dollar in the foreign exchange markets indicating that the currency is relatively stable. This puts the country in a unique position financially and safeguards its national interests than taking on the U.S. dollar. India now aims to put its local currency first in the global markets than the soon-to-be-released BRICS tender.
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India Wants To Stabilize the Rupee First & Not The BRICS Currency
India signed a deal with the United Arab Emirates (UAE) on Monday to accept the Rupee for cross-border transactions. The move comes on the heels of China convincing other developing nations to settle trade in the Chinese Yuan. BRICS is an acronym for Brazil, Russia, India, China, and South Africa.
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Interestingly, India is the only country in the bloc to have a robust economy and a steadily growing GDP of $3.75 trillion. Russia is facing an economic crisis due to the U.S. pressing sanctions for its role in the war against Ukraine.
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China is on a power prowl and is only using the BRICS alliance to further its ideology of world domination. On the other hand, Brazil and South Africa’s economies are struggling and need BRICS support to survive.
Also, India has billions worth of trade deals with the U.S. and Europe and wants to play it safe as its economy is scaling up. The stakes are high for India to jump the fence and side with China and Russia in the formation of a BRICS currency.