BRICS Treads Carefully on De-Dollarization Despite Rhetoric
The BRICS nations have taken a cautious approach to de-dollarization in their joint statement after meeting of Finance Ministers and Central Bank Governors. The document does not mention a common BRICS currency or a formal call for replacement of the US dollar, instead focusing on interoperable payment systems and local-currency settlement.
The BRICS Payment Task Force (BPTF) is working to explore 'pragmatic solutions for efficient cross-border payment mechanisms', which the bloc encourages them to continue building upon. However, statements made by Iranian President Masoud Pezeshkian and Russian President Vladimir Putin at the BRICS Business Forum in New Delhi reveal the importance of de-dollarization in the BRICS debate.
Pezeshkian argued that BRICS should develop a more resilient network of trade, investment, and financing and expand the use of national currencies. He emphasized that this step must be accompanied by the establishment of necessary instruments for managing currency risks and reciprocal settlements due to the current financial system's vulnerability to political shocks.
Putin also highlighted the need for BRICS to build a 'new, sustainable platform for global growth', as attempts are being made to restrict international trade through sanctions. This comes as Russia has a strong incentive to develop financial channels outside Western systems after sanctions restricted its access to parts of the dollar- and euro-based financial architecture.