Emphasis on the use of local currencies in trade of BRICS countries, also call for adopting new quota formula

BRICS: A meeting of BRICS foreign ministers was held in Nizhny Novgorod, Russia. During this, discussions were held on many issues including increasing the use of local currencies in trade and financial transactions between BRICS countries.

Jun 11, 2024 - 14:37
Emphasis on the use of local currencies in trade of BRICS countries, also call for adopting new quota formula

On Monday, BRICS countries emphasized the importance of using local currencies in international commerce and financial operations. Along with this, several countries expressed their commitment to rule-based, open, and transparent international trade.

A conference of BRICS foreign ministers took place in Nizhny Novgorod, Russia. During this time, numerous problems were discussed, including the usage of local currencies in trade and financial activities between BRICS nations. The ministers agreed during the discussion that the global financial framework needed to be reformed.

According to the joint statement, 'They referred to paragraph 45 of the Johannesburg II Declaration, which entrusts the Finance Ministers and Central Bank Governors of the BRICS countries with the task of considering the issue of local currencies, payment instruments and platforms and reporting to the BRICS leaders.'

In addition, the foreign ministers reiterated the demand made at COP27 to guarantee that international financial institution reform would give priority to expanding the scope of financing and facilitating easy access to resources. They anticipated that the 2025 International Bank for Reconstruction and Development shareholder review would be a major success.

A joint statement issued at the end of the meeting of the BRICS Ministers of Foreign Affairs and International Relations also emphasized a strong global financial safety net, with a quota-based and adequately resourced International Monetary Fund (IMF) at its center. According to the statement, it called for continuing the process of reform of the IMF system under the general review of quotas. It also called for adopting a new quota formula.

At the same time, Russia's Foreign Minister says that the group of emerging national economies BRICS has started actively working on reforming the international financial system and developing a platform for trading in national currencies, which was envisaged at the Johannesburg summit in 2023.

BRICS, which is an acronym for Brazil, Russia, India, China, and South Africa, is an informal partnership that promotes cooperation and communication between member countries. There is no formal or legally binding agreement between the BRICS countries. The term BRICS was coined by Jim O'Neill, who used the term to emphasize the potential of these countries within the global economy at the time. When O'Neill published his paper titled Building Better Global Economic BRICS, he believed that these countries, due to their economic growth, resources, and growing populations, would become economic superpowers within the 21st century.

Muskan Kumawat Journalist & Writer