Recently Russian-funded RT news teased a new gold-backed currency for BRICS nations. Kitco’s Neils Christensen reports:
Friday, according to state-run RT, the Russian government has confirmed that Brazil, Russia, India, China and South Africa, also known as BRICS nations, will introduce a new trading currency backed by gold. The official announcement is expected to be made during the BRICS summit in August in South Africa.
But almost immediately, the backtracking began. Antony Sguazzin reported:
The New Development Bank, a financial institution created by the BRICS bloc of emerging markets, doesn’t have any immediate plans for the group to create a common currency, its vice president and chief financial officer said.
While the members of BRICS – Brazil, Russia, India, China and South Africa – are pushing to conduct more trade between each other in local currencies, they aren’t ready to challenge the global dominance of the dollar, Leslie Maasdorp said in an interview on Wednesday with Bloomberg TV’s Haslinda Amin.
“The development of anything alternative is more a medium to long term ambition,” he said. “There is no suggestion right now to creates a BRICS currency.”
The bloc, which was formed in 2009, has been striving to gain more clout globally as a way of counterbalancing the dominance the US and its traditional allies have in multilateral financial institutions such as the World Bank and the International Monetary Fund.
Still, even the Chinese Renminbi “is a very long way from becoming a reserve currency,” Maasdorp said.
India’s external affairs minister Subrahmanyam Jaishankar also put a pin in the idea of a gold-backed BRICS currency. Hindustan Times reported:
India has made a big declaration amid speculation of a new BRICS currency. India’s external affairs minister, S. Jaishankar, said there are no plans for a new BRICS currency and that the focus is on strengthening the national currency. The statement comes amid reports of new currency discussions at the BRICS Summit. However, this confirms that BRICS is considering alternatives to the dollar-dominated payment system. Some reports state that 41 countries, including Bangladesh, Egypt, Belarus, Iran, Saudi Arabia, and Indonesia, are even in favour of a separate BRICS currency. But BRICS is not keen on a currency as it could lead to problems in financial sectors.
So, for the short term at least, it appears a gold-backed BRICS currency is off the table.
