BRICS Leaders Set to Discuss Common Currency to Challenge US Dollar Dominance in Upcoming Summit

The BRICS nations are set to discuss the feasibility of a common currency at the upcoming leaders’ summit. “It’s a matter we must discuss and discuss properly,” a South African minister stressed, noting that a growing number of countries are saying: “Why can’t we trade in our own currencies? Why are we committed to trading through the dollar?”

The BRICS countries are planning to discuss the feasibility of introducing a common currency at their upcoming leaders’ summit, which will be hosted by South Africa on Aug. 22 in Johannesburg.

While noting that she does not like “preempting BRICS leaders’ discussions,” South African Minister of International Relations and Cooperation Naledi Pandor commented on BRICS currency discussions in an interview with Bloomberg Tuesday. She stressed:

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,” she continued.

The BRICS nations, which comprise Brazil, Russia, India, China, and South Africa, have been ramping up their de-dollarization efforts, and a common BRICS currency is expected to help member countries shift away from the reliance on the USD. A Russian official recently said he expects an agreement on a BRICS currency this year. Nineteen countries have either applied to join the BRICS economic bloc or have expressed interest in joining, including Saudi Arabia and Iran.

The South African minister explained that the BRICS nations and a growing number of countries are saying:

Why can’t we trade in our own currencies? Why are we committed to trading through the dollar?

Nonetheless, she cautioned: “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.”

Multiple people expect a common BRICS currency to erode the U.S. dollar’s dominance. A former White House economist said if the BRICS nations used only their common currency for international trade, “they would remove an impediment that now thwarts their efforts to escape dollar hegemony.” However, some believe that a BRICS currency poses little to no threat the to USD, including Bank of America and Dave Ramsey.

Do you think a BRICS currency will displace the U.S. dollar as the world’s reserve currency? Let us know in the comments section below.