India’s Reserve Bank has dismissed talk of a new BRICS currency being developed to challenge the US dollar.
This followed threats from US president-elect Donald Trump to retaliate against the bloc for considering the idea.
“BRICS currency was an idea raised by one of the members and was discussed but no decision has been taken,” Reserve Bank of India Governor Shaktikanta Das said on Friday.
“The geographical spread of the countries has also to be kept in mind, unlike the euro zone which has geographical contiguity.”
India has been attempting to encourage the use of the rupee in cross-border payments as it seeks to reduce reliance on the dollar.
Das said: “We want to derisk Indian trade as dependence on one currency can be problematic at times because of appreciation or depreciation.”
Ahead of the 2023 BRICS conference, Finance Minister Enoch Godongwana said no proposal to introduce a new BRICS currency had been put forward, not even informally, and none of the countries were ready to deal with the logistics and administration of such a currency.
In response to Trump’s threat this week, the government repeated that there are no plans to create a BRICS currency.
The bloc’s New Development Bank continues to rely on the dollar for its investments, which have exceeded $30 billion in member states and other developing economies, Dirco said.
“South Africa supports the increased use of national currencies in international trade and financial transactions to mitigate the impact of foreign exchange fluctuations, rather than focusing on de-dollarisation,” it said.
Russia has been pushing ahead with a new digital payments system for the bloc, called BRICS Pay, along with promoting the use of a BRICS digital currency.
BRICS Pay was tested at the BRICS Business Forum in October, but Treasury said it is still researching and analysing digital assets.
[Photo: X/@DasShaktikanta]