South Africa’s foreign minister says a group of economically aligned nations known as the BRICS will investigate if a new global currency will allow them to effectively decouple from the US dollar.
According to Bloomberg, the group of nations, which includes Brazil, Russia, India, China, and South Africa, is planning to “discuss the feasibility” of a new global currency.
South African Minister of International Relations and Cooperation, Naledi Pandor, said BRICS members and other countries interested in joining the group are questioning the need to transact in US dollars.
“[They] ask why we can’t trade in our own currencies?” Why are we so dedicated to transacting with dollars? South Africa has a currency that is traded on the international market. However, because we have a lot of debt in dollars, you know we have to approach this issue with caution.” According to Minister Pandor, the pros and downsides of a new currency should be extensively debated.
“I dislike foreshadowing BRICS leaders’ discussions.” It’s an issue that has to be discussed thoroughly. I don’t think we can always assume the plan will work since economics is complicated and you have to consider all countries, especially when you’re recovering from a crisis.”
South Africa’s approach to a new currency may be more conservative than Russia’s.
Anatoly Aksakov, Chairman of the State Duma Committee on the Financial Market in Russia, recently stated that negotiations on a new currency are “at an early stage,” and that the currency might be launched as early as this year.
More than a dozen countries are said to be interested in joining BRICS. Saudi Arabia, Iran, Argentina, the United Arab Emirates, Algeria, Egypt, Bahrain, Indonesia, two unnamed East African and one unnamed West African countries are on the list.