South Africa’s foreign minister says a group of economically-aligned nations known as BRICS will examine whether a new global currency would effectively allow them to disconnect from the US dollar.
The group of nations, which includes Brazil, Russia, India, China and South Africa, are preparing to “discuss the feasibility” of a new common currency, reports Bloomberg.
South African Minister of International Relations and Cooperation, Naledi Pandor, says members of BRICS and additional countries interested in joining the group are questioning the necessity of relying on the US dollar to transact with one another.
“[They] are saying why can’t we trade in our own currencies? Why are we committed to trading through the dollar?
South Africa has an internationally traded currency. However, we hold a lot of debt in dollars so you know we have to approach this discussion responsibly.”
Minister Pandor says the pros and cons of a new currency should be thoroughly and carefully debated.
“I don’t like preempting BRICS leaders’ discussions. It’s a matter we must discuss and discuss properly.
I don’t think we should always assume the idea will work because economics is very difficult and you have to have regard to all countries, especially in a situation of low growth when you are emerging from crises.”
South Africa’s stance on a new currency may be more cautious than Russia’s.
Russia’s Chairman of the State Duma Committee on the Financial Market, Anatoly Aksakov, recently said negotiations on a new currency are “at an early stage”, and the currency could launch as early as this year.
More than a dozen nations are reportedly interested in joining BRICS.
The list includes Saudi Arabia, Iran, Argentina, the United Arab Emirates, Algeria, Egypt, Bahrain, Indonesia, two unnamed nations from East Africa and one from West Africa.
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