‘Brics trade focus only on national currencies’
Foreign Secretary Vinay Mohan Kwatra has addressed the speculation surrounding the potential development of a common currency among the BRICS countries. He indicated that discussions within the BRICS group, which includes Brazil, Russia, India, China, and South Africa, have primarily centered around enhancing trade through the use of their respective national currencies, rather than pursuing the creation of a common currency.
Kwatra’s statement clarifies that while the BRICS nations are engaging in dialogue to strengthen economic cooperation and collaboration, the concept of a shared currency has not been a primary focus. Instead, the emphasis has been on exploring mechanisms that facilitate trade using their own currencies, which could potentially contribute to reducing reliance on traditional reserve currencies in international trade transactions.
The prospect of a common currency among diverse nations with unique economic conditions and monetary policies is complex and requires careful consideration. Developing and implementing a common currency involves significant challenges, including issues related to exchange rate stability, monetary policy synchronization, and broader economic harmonization.
Foreign Secretary Vinay Mohan Kwatra emphasized that the primary focus of trade and economic exchanges within the BRICS discussions has been on finding ways to boost trade conducted in the individual national currencies of the member countries. This approach significantly differs from the concept of establishing a common currency among the BRICS nations.
Kwatra’s statement highlights that the discussions and exchanges among the BRICS countries have centered on practical measures to enhance trade cooperation. The emphasis on trading in national currencies implies a desire to reduce dependency on traditional global reserve currencies for trade transactions. This approach aims to strengthen economic ties among the BRICS nations while respecting their individual monetary policies and economic conditions.
The distinction drawn by Kwatra underscores that the BRICS countries are focused on pragmatic and feasible steps to facilitate trade and economic collaboration. The concept of a common currency, on the other hand, involves complex challenges and implications that require extensive planning, coordination, and harmonization of economic policies.
Foreign Secretary Vinay Mohan Kwatra elaborated on the considerations necessary for discussions around a common currency among the BRICS nations. He highlighted that the concept of a common currency involves several prerequisites that need to be addressed before any meaningful conversation about establishing such a framework can take place. Kwatra emphasized that, within the BRICS context, discussions and substantive deliberations have predominantly revolved around facilitating trade using national currencies rather than focusing on the development of a shared currency.
While various voices, including those of Brazil’s President Lula da Silva and Russian Foreign Minister Sergey Lavrov, have expressed support for the idea of a common currency among the BRICS nations, Kwatra’s remarks underscore that practical challenges and complexities need to be navigated before moving forward with such a significant initiative. He reiterated that the existing discussions have been centered on trade within the member countries’ national currencies, acknowledging the intricate process required to establish a common currency.
President Lula da Silva’s comparison to the creation of the euro highlights the idea of a unified trading currency within the BRICS bloc, similar to the euro’s role within the European Union. However, the practical implementation of such a concept involves careful consideration of economic policies, monetary coordination, and the broader implications for each member nation’s economy.
Russian Foreign Minister Sergey Lavrov’s comments about the creation of a currency within the framework of BRICS underscore the sentiment expressed by some member nations regarding the desire for greater autonomy and control over their monetary and financial systems. Lavrov’s statement reflects the belief that certain countries perceive inadequacies in the existing international monetary and financial system and aspire to establish mechanisms that safeguard their sustainable development from external influences.
Lavrov’s assertion that “serious, self-respecting countries” are exploring avenues to create their own mechanisms aligns with the idea of asserting more sovereignty over economic policies and development trajectories. The notion of creating a currency within the BRICS framework suggests a desire to foster financial independence and collaboration among the member nations.
However, while some voices within the BRICS community, including Lavrov, have advocated for the development of a common currency, it appears that India, represented by External Affairs Minister S Jaishankar and Foreign Secretary Vinay Mohan Kwatra, has taken a more cautious stance in public discussions on this matter. Kwatra’s comments, as highlighted, emphasize that the focus of the BRICS grouping remains centered on deepening trade using national currencies rather than immediately pursuing the creation of a common currency.
