Brazil’s Ambassador to India Kenneth Felix Haczynski da Nobrega confirmed in a recent interview that the BRICS alliance has no plans of creating a new currency to challenge the US dollar. The statement comes after the 17th summit in Rio de Janeiro which saw member nations push towards a multipolar financial world.
The formation of a new BRICS currency is not feasible and was not discussed at the 17th summit on July 6 and 7. However, Kenneth revealed that the alliance will focus on settling trade with local currencies instead of the US dollar. The transactions will be on a “voluntary basis” among member nations to adapt local currencies for cross-border transactions.
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BRICS Has No Plans of Creating a New Currency, Says Envoy
The Brazilian Ambassador to India revealed that BRICS is not envisioning creating a new currency. He stressed that the bloc is envisaging business deals in local currencies to replace the US dollar. The possibility of member nations accepting local currencies for trade is higher as they aim to end reliance on the USD.
“To speak of a BRICS currency… that is something that does not exist,” he said to The Hindu. “We are not envisioning creating a currency in the foreseeable future,” he confirmed.
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“What we are envisaging is stimulating businesses of BRICS countries to adopt local currencies as an option for conducting trade. This will be on a voluntary basis, and it’s nothing new. So this is just one more option, not a move against the dollar,” he said.
A new BRICS currency requires a rigorous legal framework which the bloc is not prepared to work on. The best option for now, as explained by the Envoy is to use local currencies for settlements. Launching a new tender also needs to gain the trust of other nations to survive in the forex markets.