Hideo Nakamura The Roscongress Foundation, which is a group in Russia that tries to think of solutions for the world, wrote about the New Development Bank (also known as the BRICS bank) in their recent report. This Bank could give countries loans if they can prove they are able to export energy. This loan would be liquid and just like something called Special Drawing Rights (SDR).
BRICS Bank
A company in Russia, called the Ronscongress Foundation, has come up with the idea to consider introducing the New Development Bank – also known as BRICS bank – as an alternative to traditional money-managing companies like the International Monetary Fund (IMF).
Recently, Rosscongress wrote a report about how some countries have stopped using dollars when trading energy. This report showed that the New Development Bank, made up of BRICS bloc members has access to loans based on its ability to export energy.
Energy-exporting nations could use some of the money they get from other countries to do projects they need, and increase their trading which involves swapping items with each other without bumps. The New Development Bank play a part in helping those countries receive loans that can buy the energy these nations need.
The BRICS (an international economic group) are making these special debit cards called ‘energy loans’ which work like IMF’s “Special Drawing Rights”. They can be used in multiple countries and if more nations join the BRICS, then more people will use them.
BRICS nations are planning to challenge the US Dollar Dominated Financial System
Experts in Russia are talking about a possible plan which could replace the U.S. dollar financially. Currently, this system allows America to impose restrictions on countries such as China and Russia by using economic sanctions. Sergey Chevrychkin, a Russian financial analyst, thinks that if people around the world feel threatened of facing similar sanctions, they may switch to these new alternatives. According to him, people will take that chance and turn away from the U.S. dollar-dominated system.
Chevrychkin believes that if certain measures are taken, people will stop trusting the global system of protecting their belongings. It is expected that by 2028, BRICS nations will be responsible for more economic growth than the G7 countries altogether. Therefore, this could lead to a global financial institution being created just for those BRICS nations.
The BRICS countries – Brazil, Russia, India, China and South Africa – are planning to introduce their own currency. This topic will be discussed in the upcoming BRICS summit to be held in August in South Africa. Do you think it’s a good idea for the BRICS bank to become like an alternate version of the IMF? Let us know by writing your comment below.
