Elvira Nabiullina, the head of the Central Bank of Russia, recently discussed the complexity of creating a unified currency for the BRICS nations, underscoring that such an ambitious project would demand approval from a multitude of stakeholders. Despite acknowledging the noteworthy proposition of a common BRICS currency, Nabiullina emphasized that its execution could present significant difficulties.
The Remarks from the Russian Central Bank Governor
The comments made by Nabiullina regarding the proposed BRICS currency came on the fringes of the annual Financial Congress of the central bank, held in St. Petersburg on July 6-7. The BRICS economic coalition includes Brazil, Russia, India, China, and South Africa.
The topic of a common BRICS currency is anticipated to garner substantial interest at the forthcoming BRICS leaders' summit in South Africa, slated for August 22-24. The idea gained prominence last week when RT, a Russian media outlet, revealed Russia's confirmation of BRICS's intention to introduce a gold-backed currency. However, this report has yet to be formally affirmed or substantiated by officials from BRICS.
Expressing her views to the media, Nabiullina iterated that the concept of a BRICS currency "merits consideration." Nonetheless, she underscored the project's implementation hurdles, emphasizing, "Any supranational currency proposal necessitates the approval of numerous parties. It's certainly not a straightforward project." She added:
Currently, we are focusing our endeavors on enhancing bilateral settlements using national currencies and developing the infrastructure that links our payment systems, as per the present requirements of businesses.
While RT reported Russia's affirmation that the proposed common BRICS currency would be gold-backed, a high-ranking official of the New Development Bank, also referred to as the BRICS Bank, contended that the formation of any alternative to the U.S. dollar remains a mid to long-term aspiration. According to him, "No one is presently proposing that BRICS will establish an alternative currency." However, the idea of a common BRICS currency is still widely expected to disrupt the prevailing dominance of the U.S. dollar.
