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Editor’s Note: The countries aligned with a new global financial organization, BRICS, have announced the start of a new international payment system known as “BRICS Pay”. Any details for this new system and difficult to discover as most internet sites are blocked from providing information about this program here in the US. As more is learned, this will be shared…stay tuned! Is “BRICSPay” the new BRICS currency?
JOHANNESBURG (Reuters) -Brazil’s President called on Wednesday for the BRICS nations to create a common currency for trade and investment between each other, as a means of reducing their vulnerability to dollar exchange rate fluctuations.
Luiz Inacio Lula da Silva made the proposal at a BRICS summit in Johannesburg.
Officials and economists have pointed out the difficulties involved in such a project, given the economic, political and geographic disparities between Brazil, Russia, India, China and South Africa.
WHY DOES LULA WANT A BRICS CURRENCY?
Brazil’s president doesn’t believe nations that don’t use the dollar should be forced to trade in the currency, and he has also advocated for a common currency in the Mercosur bloc of South American countries.
A BRICS currency “increases our payment options and reduces our vulnerabilities,” he told the summit’s opening plenary session.
WHAT DO OTHER BRICS LEADERS THINK?
South African officials had said a BRICS currency was not on the agenda for the summit.
In July, India’s foreign minister said, “there is no idea of a BRICS currency”. Its foreign secretary said before departing for the summit that boosting trade in national currencies would be discussed.
Russian President Vladimir Putin said the gathering, which ha attended via videolink, would discuss switching trade between member countries away from the dollar to national currencies.
China has not commented on the idea. President Xi Jinping spoke at the summit of promoting “the reform of the international financial and monetary system”.
WHAT ARE THE CHALLENGES OF SETTING UP A BRICS CURRENCY?
Building a BRICS currency would be a “political project”, South African central bank governor Lesetja Kganyago told a radio station in July.
“If you want it, you’ll have to get a banking union, you’ll have to get a fiscal union, you’ve got to get macroeconomic convergence,” Kganyago said.
The BRICS Alliance of Brazil, Russia, India, China and South Africa has expanded to include Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emeritus. (UAE). There were other countries, including Germany and the US, that have a secret Alliance with BRICS. The BRICS Alliance now represents over half of the World’s population and 60% of the World’s Gross National Product. France President Emmanuel Macron was rejected entry to the BRICS Summit.
Rose Rambles... 