On January 25, Russian Foreign Minister Sergey Lavrov told journalists in Angola that BRICS, an acronym for Brazil, Russia, India, China, and South Africa, may soon explore the possibility of creating its own currency. What message does this plan send regarding the greenback's dominance?
While delivering a statement after his meeting with Angolan President Joao Lourenco, Russian Foreign Minister Sergey Lavrov emphasized that the West had shattered vital principles of the inviolability of property, the presumption of innocence, fair competition, and globalization.
Under these circumstances, BRICS, an informal group of developing nations, and the CELAC (Community of Latin American and Caribbean States) have started to discuss the establishment of their own new currencies within the frameworks of these blocs, according to the Russian foreign minister.
Earlier this week, President of Brazil Luiz Inacio Lula da Silva touched upon the issue of the creation of a common currency for BRICS and the countries of Mercosur, a South American trade bloc, during his meeting with his Argentine counterpart Alberto Fernandez.
Lula da Silva specified that the countries could establish a type of currency for trade that the Central Bank sets. He added that he would prefer international trading transactions to always be settled in national currencies to reduce dependence on the US dollar.
Last week, the two presidents wrote an op-ed signaling their willingness to advance the discussions on a common South African currency that "could be used for both financial and commercial flows, reducing the costs of operations and [the continent's] external vulnerability."
Mikhail Khazin, a Russian economist, researcher, and publicist, has addressed seeming contradictions in Lula da Silva's statement. The Russian economist is inclined to believe that while BRICS and CELAC members are talking about a single currency system, they are likely to create a single payment system at the first stage.
"It now makes sense to create a payment system that combines the currency systems of the Eurasian, Chinese, Indian and Latin American zones," Khazin told Sputnik. "It is necessary to create a payment system independent of the dollar."
He expects that four new currency zones will be formed, comprising the Latin American, Eurasian, Chinese, and Indian regions. Only after that, in about 10 years, would it be logical to create a single currency, as a "superstructure," for all of them, akin to the euro, according to Khazin.....More Below
