Calls For BRICS Nations To Drop US Dollar Use In Intra-Bloc Transactions

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Denis Manturov, the Russian trade minister has called on the members of the BRICS nations: Brazil, Russia, India., China and South Africa to increase the volume of settlements in national currencies to be more independent from Washington’s policies. Manturov suggested the possibility of boosting non-dollar settlements during a videoconference with fellow BRICS trade ministers on Monday. According to the Minister, trade in national currencies is a key aspect of BRICS cooperation. “Rational, balanced use of this tool will help to increase the stability of our countries’ economies and reduce dependence on US’ policies,” he said.

Manturov called on the fellow ministers to use the BRICS’ New Development Bank (NDB) more actively, which was specifically created for these purposes.

The five-nation bloc has a combined nominal GDP of $21 trillion and represents more than 40 percent of the world’s population.

Manturov’s call came as usage of the US dollar in China-Russia bilateral trade has fallen to 46% of total volume from 90% in 2015. His call may yield some results with shifts as increasing usage of the Chinese RMB Yuan, Russian Ruble and Indian Rupee in particular start to increase in BRICS trade. However Brazil and India won’t wish to upset Washington too much as both depend on positive US ties, with the Brazilian President Bolsonaro close to President Trump.

Nonetheless, a 10% annual decrease in US dollar use and has been the case between China and Russia could start to cross over into BRICS and other currency transactions should the United States consider punishing Brazil and India in future trade disputes. That is an issue likely to be determined upon the outcome of the upcoming US elections and especially if Trump is retained.

 

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Silk Road Briefing is written by Dezan Shira & Associates. The firm has 28 offices throughout Asia, and assists foreign investors into the region. For strategic advisory and business intelligence issues please contact the firm at silkroad@dezshira.com or visit www.dezshira.com

 

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