NEW DELHI: The BRICS (Brazil, Russia, India, China South Africa) will likely focus on the expansion of the group at the summit slated in the second half of August in South Africa. The creation of a common currency as an alternative to the dollar, however, is not on the agenda.
‘There is no idea of a BRICS currency,’ EAM S Jaishankar made this comment while addressing a public event in the first week of July. This statement may have come as a surprise given India was seen as largely supporting the move for an alternative to the US dollar in cross-border trade.
In June, India and the UAE signed an agreement on the use of local currencies for cross-border trade, and Delhi is preparing to make its first payment for Emirati oil in Indian rupees. A similar agreement had been signed with Sri Lanka, and earlier with Malaysia in the month of April. Looking ahead, even Bangladesh could come on board given its dollar shortage.
However, this does not mean trade in the US dollar is going away soon. In fact, none other than the American business magnate and investor Warren Buffet says the dollar will last another 50 years. But by slowly chipping away at cross-border trade in dollars, India and other countries are showing a preference for an order which they believe will be fair and more equitable.