BRICS summit:Navigating economic policies and RISING tensions in US dollar trade

In a monumental global gathering, South Africa is on the verge of hosting the 15th annual BRICS summit this week.

Leaders hailing from the member nations, joined by potential newcomers, are converging to deliberate over crucial economic strategies and address the prevailing dominance of the US dollar in worldwide trade.

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According to Business Live, economic experts across the globe are anticipating a whirlwind of media coverage for this summit, unfolding against the backdrop of intensifying tensions between Western superpowers and the resurging influence of Russia and China.

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BRICS SUMMIT TO CALM RISING TENSIONS

Mounting tensions darken the outlook for global economies, highlighting the importance of alliances among emerging nations. China and Russia favor broadening the BRICS to balance Western-led institutions and the US dollar.

However, Brazil and India, considering their ties to the US, are more careful about expanding the BRICS.

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The South African government is struggling to express a clear position due to strong trade ties with the West and China. President Cyril Ramaphosa supports expanding the BRICS and aligning with China and Russia.

Ramaphosa stressed that a bigger BRICS group would include diverse nations sharing a vision of a fair global order. This support matters, as the West watches South Africa’s stance at the summit.

There’s talk about creating a new currency to reduce reliance on the US dollar, sparked by US rate hikes and Russia’s assertiveness, which boosted the dollar’s value.

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A potential alternative currency could act as a shield against sanctions, especially after the West penalized Russia for entering Ukraine in 2022.

Ideas include using member states’ currencies for trade and a joint payment system. Though a common currency is attractive, experts note it’s a long-term goal.

Despite speculation, a new currency’s creation is far off. The BRICS-founded New Development Bank in Shanghai is exploring this. Yet, concrete plans aren’t ready, and any move is seen as medium- to long-term.

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BILATERAL TRADE AGREEMENTS UNDERGOING?

As the focus shifts to currency reform, it’s important to note that some BRICS nations are strengthening trade deals with their own currencies. For instance, India and Malaysia are using the rupee more in cross-border transactions. China and Brazil also trade in their own currencies.

India, Russia, and South Africa discuss linking their currencies for settlements. Regarding de-dollarisation speculation, Finance Minister Enoch Godongwana clarified that no direct talks on this occurred within the BRICS. He stressed collaboration outside the US dollar realm.

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During the summit, South Africa’s role in shaping the BRICS gained global attention. With diverse nations seeking economic balance and influence, summit outcomes will have far-reaching effects.

As seen on social media, Heads of State and members of government have been received at the OR Tambo International Airport