BRICS: The First – Negative – Results of the Indian Prime Minister’s Visit to the USA
India says “no” to the future internal currency of the BRICS group countries, which was designed to reduce the use of the dollar in mutual economic and trade transactions between Brazil, Russia, India, China, and South Africa.
India has questioned the launch in the foreseeable future of the “internal” currency of the BRICS group that includes Brazil, Russia, India, China, and South Africa. On Tuesday, July 11, the Indian media quoted External Affairs Minister Subrahmanyam Jaishankar, according to whom “India has no plan in regards to the launch of a special currency of the BRICS countries.” According to the head of Indian diplomacy, “New Delhi is concentrating on strengthening the rupee, and this is the absolute priority of the government. ”At the BRICS summit in Johannesburg in August, “the internal currency is not on the agenda” because there are “many other urgent issues to discuss.” “Currencies will be the national issue of each individual country for a long time to come,” added Jaishankar.
New Delhi’s position was announced a few days after Indian Prime Minister Narendra Modi’s historic trip to Washington DC, during which India and the USA announced the policy of a strategic alliance. At this time, India has good economic and trade relations with the USA and European countries and does not want to risk its multibillion-dollar contracts by supporting the launch of a new currency designed to reduce the use of the dollar in trade exchanges between the countries of the group. Another reason for the Indian “no,” according to the local press, is related to the rise of China, which is becoming the true engine of the entire BRICS group. This cannot but worry New Delhi. According to international observers, the ball is now in China’s court, and the BRICS countries, primarily Russia and Brazil, are waiting for Beijing’s reaction.
In this context, Bloomberg quotes the vice president of the New Development Bank (the BRICS group’s credit institution), Leslie Maasdorp, who defined the BRICS currency as a “distant prospect.”
“The introduction of a currency that can become an effective alternative to the dollar is a medium-term project. There are currently no concrete proposals to launch a BRICS group currency,” Maasdorp said in an interview with Bloomberg, noting that “the Chinese yuan at this point is also still very far from becoming a true global reserve currency.”
India’s position has greatly disappointed Russia’s political elites, who are betting on the weakening of the dollar’s position in global economic and trade exchanges. Russia has found itself in the epicenter of a storm of Western sanctions and is looking for a way out with “friendly” countries. In addition to the BRICS currency, Russia would like to offer an alternative to the SWIFT interbank communication system and create its own deposit hub for international payments and collection, offering financial services not only for the BRICS countries, but also for the Arab countries and the largest economies of the global south.