South African Minister Tells BRICS Nations Not to Rush Decision on Common Currency

The South African minister of international relations, Naledi Pandor, has urged Brazil, Russia, India, China and South Africa (BRICS) countries to be wary of making a hurried decision when they meet in August to discuss launching a common currency. Pandor said her country will “not shy away from discussions” that relate to her country’s national interests. The minister also revealed that South Africa’s debt is primarily denominated in dollars, therefore the country cannot easily ditch the greenback.

With just a few months before Brazil, Russia, India, China, and South Africa (BRICS) all converge in Johannesburg to discuss launching a common currency, South Africa’s international relations minister said member states should guard against making a hurried decision. In her remarks published by Bloomberg, the minister, Naledi Pandor, said while the calls for an alternative to the greenback are growing, BRICS nations still need to “approach this discussion responsibly.”

The warning by South Africa’s international relations minister came against the background of rising calls for the establishment of a common currency to be used by BRICS nations. Russia, which has been sanctioned by the U.S. and the European Union, has been leading the calls for the creation of an alternative to the dollar-dominated financial system.

Although many countries have expressed their willingness to de-dollarize, some experts have said the much anticipated U.S. dollar collapse will not happen anytime soon. Others like Dave Ramsey, a personal finance expert and best-selling author, have claimed that BRICS countries lack the muscle to take down the dollar.

However, despite these warnings by mainly pro-U.S. dollar economic commentators, Pandor said South Africa will “not shy away from discussions” that relate to her country’s national interests. Pandor nonetheless acknowledged that the idea of replacing the U.S. dollar with another currency will not be easy.

“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 for all countries, especially in a situation of low growth when you are emerging from crises,” Pandor reportedly said.

The minister also revealed that South Africa’s debt is primarily denominated in dollars hence the country cannot easily ditch the greenback.

Meanwhile, the South African-based money manager Vestact is also quoted in the report dismissing suggestions that the greenback will be toppled by alternatives like the Chinese yuan. According to the money manager, “no other currency has the recognizability, stability and economic might behind it.”

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