At the upcoming BRICS summit in Rio, countries are looking to increase the share of trade in local currencies, aligning with the Global South's demands for a more balanced financial system.
Trade in local currencies establishes itself as a diplomatic priority
As the BRICS summit approaches, set for July 6-7, member countries are discussing increasing trade volumes in national currencies. Both Russia and Brazil confirm that such transactions are already taking place. Denis Alipov, the Russian ambassador to India, stated that 'the BRICS bloc is a serious platform to discuss common solutions.' This initiative aims to reduce dependence on the dollar and strengthen the monetary sovereignty of Global South countries.
A common currency? A project still far from reality
While the idea of a single currency within BRICS has attracted attention, official statements effectively dampen short-term expectations. 'Discussions about a common BRICS currency are at a very preliminary stage,' said Dammu Ravi, the Indian representative of the group, stressing that 'for now, we are focusing solely on transactions in national currencies.' Political and economic divergences among members complicate any attempt at currency standardization.
BRICS's strategy of financial disintermediation
The strategic direction taken by BRICS reflects the members' desire for greater financial resilience. Transactions in local currencies are becoming more relevant, partly due to growing discontent with the existing dollar-dominated economic system. The initiative enjoys broad diplomatic consensus and aims to enhance economic independence with minimal confrontation with the West.
Thus, the BRICS summit in Rio could mark an important step towards strengthening financial ties among member countries through trade in local currencies, despite the absence of a common currency in the near future.
