Tuesday, March 19, 2024

BRICS Nations to Promote Local Currency Usage in Trade

Foreign ministers from the BRICS bloc countries have announced their intention to encourage the use of domestic currencies in cross-border trade. During a meeting held in South Africa, the top diplomats emphasized the significance of financial inclusion and welcomed technological advancements that support this goal.

BRICS, consisting of Brazil, Russia, India, China, and South Africa, aims to stimulate trade transactions using local currencies in international trade. The plan was unveiled during a gathering of foreign ministers in Cape Town, as reported by Russian news agencies Tass and RIA Novosti.

The first diplomats from these nations convened in South Africa’s oldest city from June 1 to 2. The hosting country assumed the BRICS chairmanship earlier this year, taking over from China. In a joint statement released by the Department of International Relations and Cooperation, the foreign ministry of South Africa, the ministers expressed:

“The importance of encouraging the use of domestic currencies in international trade and financial transactions between BRICS countries, as well as their trading partners.”

The representatives also highlighted the significance of financial inclusion, which enables individuals to benefit from economic growth and prosperity. They welcomed the development of various technological tools for financial inclusion within the BRICS countries, believing that such tools can enhance people’s participation in the formal economy.

Several other countries have expressed their intentions to join the association, including Argentina, Iran, Indonesia, Turkey, and Egypt. Saudi Arabia is reportedly in talks regarding membership as well, according to a recent report.

The BRICS heads of state are scheduled to convene in Johannesburg from August 22 to 24. The creation of an international reserve currency based on the currencies of the BRICS states is likely to be a topic on the summit’s agenda, as stated by Russian Deputy Prime Minister Alexey Overchuk.

In a previous interview, Anil Sooklal, South Africa’s ambassador to the group, highlighted efforts to strengthen economic and financial ties among BRICS members, with the ultimate aim of establishing a common currency. However, he acknowledged that the bloc’s current focus is on expanding the use of their respective national currencies.

What are your expectations regarding the increased usage of BRICS currencies and other local currencies in international settlements in the years to come? Feel free to share your thoughts in the comments section below.

What is the purpose of encouraging the use of local currencies in international trade by the BRICS nations?

The purpose is to reduce reliance on major global currencies and promote economic independence among the BRICS nations. By encouraging the use of local currencies, they aim to strengthen their economies, enhance financial inclusion, and stimulate trade transactions within the bloc.

Which countries are part of the BRICS bloc?

The BRICS bloc consists of Brazil, Russia, India, China, and South Africa. These nations represent some of the largest emerging economies in the world.

What is financial inclusion and why is it important?

Financial inclusion refers to providing access to financial services and opportunities to all individuals, particularly those who are unbanked or underserved. It is important because it allows people to participate in the formal economy, benefit from economic growth, and improve their livelihoods.

How can the use of local currencies benefit international trade?

The use of local currencies can offer several benefits in international trade. It reduces exchange rate risks, transaction costs, and reliance on foreign currencies. It also promotes bilateral trade among BRICS nations and strengthens economic cooperation within the bloc.

Are there plans for a common currency among the BRICS nations?

While there have been discussions about creating a common currency among the BRICS nations, the current focus is on expanding the use of their national currencies. The idea of a common currency is still being explored, but for now, the emphasis is on encouraging the use of local currencies in international transactions.

Which other countries are interested in joining the BRICS association?

Several countries have expressed their intentions to join the BRICS association, including Argentina, Iran, Indonesia, Turkey, and Egypt. Membership talks are also underway with Saudi Arabia. The inclusion of these countries would further expand the economic and political influence of the bloc.

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4 comments

JohnSmith87 June 3, 2023 - 2:29 am

Wow, it’s great to see the BRICS nations coming together to encourage local currens in trade! Financial inclusion is so impotant, and using new technologies can really help people participate in the economy. Can’t wait to see how this all unfolds!

Reply
Emma1990 June 3, 2023 - 2:29 am

This is awesome news! BRICS nations promoting local currecies in trade will boost their economies and strengthen their ties. It’s about time we prioritize financial inclusion and leverage technology for economic growth. Exciting times ahead!

Reply
EconGeek24 June 3, 2023 - 2:29 am

The BRICS nations are making a smart move by pushing for local currency usage in international trade. This will reduce dependency on major global currencies and empower these emerging economies. Financial inclusion is key for inclusive growth. Thumbs up!

Reply
LilyTrader June 3, 2023 - 2:29 am

I’m intrigued to see how this plan unfolds! Encouraging the use of local currencies in trade could have significant implications for the BRICS nations. It’ll be interesting to watch if this leads to increased stability and trade among these economies.

Reply

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