On Thursday, Dmitry Birichevsky, the head of the department for economic cooperation at Russia’s Foreign Ministry, said that although the BRICS nations are making progress in establishing a single currency for use in trade between members of the bloc, so far it has been a long and “difficult” process.
The BRICS group of developing economies, which includes Brazil, Russia, India, China and South Africa, are looking to move away from the use of the dollar and euro as a means of settling trade obligations between members by using alternative payment systems as well as trade in national currencies.
Birichevshky said, “A single currency is something that may well emerge in the future, but the path to it is slow and difficult. I’m sure we’ll get there anyway, because you can’t be tied to one thing, you need to diversify constantly.”
The US-led use of the Western financial system as a tool of political control, to penalize the Russian government over the invasion of Ukraine, has caused nations all over the world to evaluate whether potential future political disagreements with Western nations could lead to similar punitive measures being taken against their economies. Among those nations, the BRICS alliance has looked at creating a common currency to be used by members of the bloc, as well as at alternatives to the dollar-based financial institutions for use in settlement of trade.
The diplomat noted that the fact de-dollarization has already begun will impart a momentum to the process of the BRICS nations moving toward a single currency.
He added that he has hope that a declaration in favor of trade in national currencies would merit a mention in the final declaration at the G20 summit in India which is approaching.
He added, “We expect that the topic of the global monetary and financial system, as well as issues of settlements in national currencies, and the role of the developing world in general will be covered in detail.”
One of several economists to voice such a sentiment, a former IMF executive said at the recent BRICS summit in Johannesburg that the international financial system based upon the dollar has become increasingly “dysfunctional” as it does not serve the need of developing economies, or the multipolarity that is emerging in the world.
