Sputnik
BRICS' proposed reserve currency could ensure global economic stability by shielding nations from Western sanctions and financial crises, Ashraf Patel, a senior research associate with the Institute for Global Dialogue and member of the South Africa BRICS Think Tank Network, told Sputnik. Will a new BRICS currency replace the dollar?
The BRICS group has requested guidance from the Shanghai-based New Development Bank on how a potential new common currency might facilitate the development of the global economy and shield the group's members from Western sanctions. In this respect, a BRICS single currency might replace the US dollar, according to international observers.
"The world is caught up in many multiple-level geopolitical fractures," Ashraf Patel told Sputnik. "BRICS has the potential to provide a 'broad-based economic stability' in world affairs, while simultaneously creating alternative platforms in key areas, one being the BRICS reserve currency. In 2022, as a whole, the BRICS ran a trade surplus, also known as a balance of payments surplus, of $387 billion – mostly thanks to China. Many mechanisms exist in a geopolitical world order."
In January, the bloc announced that it may soon explore the possibility of creating its own currency to bypass the US dollar. The West's sweeping sanctions against Russia, including cutting the nation off from SWIFT and freezing its Central Bank assets are believed to become a wake-up call for emerging economies across the world. But could the US dollar be replaced as a world currency?
According to Lula, the time is ripe for Latin America and BRICS nations to drift away from the greenback to boost multilateral trade and economic development of the Global South. "Who decided that the dollar was the (trade) currency after the end of gold parity?" the Brazilian president asked rhetorically during his visit to the New Development Bank in April
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