The BRICS nations are taking significant steps towards enhancing their economic independence by promoting local currency trade and exploring commodity-backed finance. However, the responses from member states regarding these initiatives have varied, reflecting differing priorities and economic strategies. According to the results published in the material, these differences could shape the future of the bloc's economic policies.
BRICS Unit Initiates Pilot Program
The BRICS Unit has initiated a pilot program that aims to reduce reliance on the US dollar for cross-border transactions. This program is structured with 40% of its backing in gold and silver, while the remaining 60% is composed of local currencies. This innovative approach is designed to bolster economic resilience among member countries.
New Development Bank's Lending Programs
In addition to this, the New Development Bank has introduced substantial lending programs, with a notable shift towards domestic currencies. Currently, one-third of the bank's loans are issued in local currencies, highlighting a growing trend among BRICS nations to conduct trade and finance in their own currencies.
Recent Examples of Currency Shift
Recent examples of this shift include:
- India's recent purchase of crude oil from the UAE using rupees
- Brazil's agreements with China to conduct trade without the dollar
These developments signify a concerted effort among BRICS nations to establish a more autonomous economic framework.
Recently, Indian Prime Minister Narendra Modi and German Chancellor Friedrich Merz met to strengthen economic ties between India and Germany, focusing on trade and energy. This development contrasts with the BRICS nations' efforts to enhance economic independence through local currency trade. For more details, see further information.
