<p>The economist who coined the BRICS acronym during his time at Goldman Sachs has derided the idea of the group of emerging nations developing their own currency as 'ridiculous', as Brazil, Russia, India, China, and South Africa contemplate expanding the bloc.&nbsp;</p>

<p>Lord Jim O'Neill, who introduced the term BRICS in a 2001 research note as chief economist at Goldman Sachs, claimed in an interview with Financial Times that beyond geopolitical symbolism, BRICS has not achieved anything substantial since its inception.</p>

<p>The current BRICS five contribute 31.5 per cent of global GDP overtaking the cumulative financial strength of Group of Seven (Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States, as well as the European Union) nations who contribute 30 per cent of global GDP.</p>

<p>The BRICS is expected to contribute over 50 per cent of global GDP by 2030, with the proposed enlargement almost certainly bringing that forward.</p>

<h2><strong>BRICS expansion: Discourse over common currency and countering dollar's dominance</strong></h2>

<p>The BRICS nations are contemplating a definite expansion during the upcoming summit in South Africa next week. At the same time, Brazil's President Lula has staunchly called for countering the dollar's dominance, an assertion which has found support from host South Africa's President Cyril Ramaphosa.&nbsp;</p>

<p><strong>Also read |&nbsp;<a href="https://www.wionews.com/business-economy/brazils-president-lula-assents-to-common-brics-currency-to-counter-us-dollars-dominance-582289">Brazil's President Lula seeks common BRICS currency to counter US dollar's dominance</a></strong></p>

<p>Russia and China, too, have called for challenging the US dollar's global reserve currency status.</p>

<p><strong>Also read |&nbsp;<a href="https://www.wionews.com/business-economy/why-cant-we-trade-in-our-own-currencies-brazils-lula-repeats-de-dollarisation-call-of-brics-nations-608490">'Why can’t we trade in our own currencies?': Brazil's Lula repeats de-dollarisation call of BRICS nations</a></strong></p>

<p>O’Neill&nbsp;also slammed the proposition of a BRICS central bank, saying it will be difficult to implement.</p>

<h2><strong>Is a potential expansion of BRICS creating jitters in the West?</strong></h2>

<p>Yes, it is. This is because an expansion of BRICS on the lines of economic cooperation would seek alternative financial pathways for international trade against US-dominated SWIFT and the dollar as the default currency for the market.</p>

<p><strong>Also watch |&nbsp;Is BRICS raging against the US Dollar an exercise in futility?</strong></p>

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<p>At the same time, New Delhi would seek assurances from China to not oppose its bid for a permanent membership at the UN Security Council as many nations who constitute 'Friends of BRICS' (the supposed members who could become part of the bloc upon successful expansion) support reforms at the UN Security Council.</p>

<h2><strong>Is India opposing expansion of BRICS?</strong></h2>

<p>Reports in the Western media that India opposes the proposition of expansion of BRICS with the inclusion of other countries of the Global South are imprecise.</p>

<p>New Delhi has sought wider consultation on BRICS expansion but at the same time has expressed positive support for China's proposal to expand the bloc despite the bilateral divergences between Beijing and New Delhi.&nbsp;</p>

<p>India's foreign minister Dr S Jaishankar has asserted that BRICS is "an established feature of the global landscape".</p>

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The economist who coined the BRICS acronym during his time at Goldman Sachs has derided the idea of the group of emerging nations developing their own currency as 'ridiculous', as Brazil, Russia, India, China, and South Africa contemplate expanding the bloc.

The economist who coined the BRICS acronym during his time at Goldman Sachs has derided the idea of the group of emerging nations developing their own currency as 'ridiculous', as Brazil, Russia, India, China, and South Africa contemplate expanding the bloc. Lord Jim O'Neill, who introduced the term BRICS in a 2001 research note as chief economist at Goldman Sachs, claimed in an interview with Financial Times that beyond geopolitical symbolism, BRICS has not achieved anything substantial since its inception. The current BRICS five contribute 31.5 per cent of global GDP overtaking the cumulative financial strength of Group of Seven (Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States, as well as the European Union) nations who contribute 30 per cent of global GDP. The BRICS is expected to contribute over 50 per cent of global GDP by 2030, with the proposed enlargement almost certainly bringing that forward. BRICS expansion: Discourse over common currency and countering dollar's dominance The BRICS nations are contemplating a definite expansion during the upcoming summit in South Africa next week. At the same time, Brazil's President Lula has staunchly called for countering the dollar's dominance, an assertion which has found support from host South Africa's President Cyril Ramaphosa. Also read | Brazil's President Lula seeks common BRICS currency to counter US dollar's dominance Russia and China, too, have called for challenging the US dollar's global reserve currency status. Also read | 'Why can’t we trade in our own currencies?': Brazil's Lula repeats de-dollarisation call of BRICS nations O’Neill also slammed the proposition of a BRICS central bank, saying it will be difficult to implement. Is a potential expansion of BRICS creating jitters in the West? Yes, it is. This is because an expansion of BRICS on the lines of economic cooperation would seek alternative financial pathways for international trade against US-dominated SWIFT and the dollar as the default currency for the market. Also watch | Is BRICS raging against the US Dollar an exercise in futility? × At the same time, New Delhi would seek assurances from China to not oppose its bid for a permanent membership at the UN Security Council as many nations who constitute 'Friends of BRICS' (the supposed members who could become part of the bloc upon successful expansion) support reforms at the UN Security Council. Is India opposing expansion of BRICS? Reports in the Western media that India opposes the proposition of expansion of BRICS with the inclusion of other countries of the Global South are imprecise. New Delhi has sought wider consultation on BRICS expansion but at the same time has expressed positive support for China's proposal to expand the bloc despite the bilateral divergences between Beijing and New Delhi. India's foreign minister Dr S Jaishankar has asserted that BRICS is "an established feature of the global landscape". WATCH WION LIVE HERE You can now write for wionews.com and be a part of the community. Share your stories and opinions with us here.

BRICS' idea of 'common currency', potential expansion creates jitters in the West

<p>BRICS nations are leading the Greenback backlash against the global hegemony of the US dollar. A potential new shared currency between them, they say, could shield other member countries from the impact of sanctions such as the ones imposed against Russia by the United States and European countries.</p>

<p>The foreign ministers of Brazil, Russia, India, China and South Africa met in Cape Town earlier this week. The shared currency for international trade among the bloc's nations was an issue that topped their agenda.</p>

<p>The BRICS are looking to “ensure that we do not become victims to sanctions that have secondary effects on countries that have no involvement in issues that have led to those unilateral sanctions,” Naledi Pandor, South Africa’s minister of international relations, told reporters after the meeting.</p>

<p><strong>Also read |&nbsp;<a href="https://www.wionews.com/business-economy/brics-backed-new-development-bank-invites-saudi-arabia-to-join-the-club-598674">BRICS-backed New Development Bank invites Saudi Arabia to join the club</a></strong></p>

<p>As part of bloc's efforts to come up with a shared currency, proposals are reportedly being considered by officials at the New Development Bank, the Shanghai-based lender created by BRICS nations, and the BRICS "will be guided to them as to what the future models might be," Pandor said.</p>

<h2><strong>Greenback backlash: What else is happening?</strong></h2>

<p>All over the world, a backlash is brewing against the hegemony of the US dollar.&nbsp;</p>

<p>Brazil and China recently struck a deal to settle trade in their local currencies, seeking to bypass the US dollar.&nbsp;</p>

<p>India and Malaysia have also signed an accord to ramp up usage of the rupee in bilateral trade.&nbsp;</p>

<p>Among its allies, France is starting to complete transactions in yuan.&nbsp;</p>

<p><strong>Also watch |&nbsp;</strong><strong>Gravitas: India asks BRICS to fight for terror</strong></p>

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<p>In this sudden wave of agreements aimed at sidestepping the greenback, experts detect a sort of gradual, meaningful action that was missing in the past.&nbsp;</p>

<p>For many countries, their reasons for taking these measures are not much different from one another.&nbsp;</p>

<p>The US dollar, they say, is being weaponised to push America’s foreign-policy priorities and punish those that oppose them.&nbsp;</p>

<p>"Countries have chafed for decades under US dollar dominance," Jonathan Wood, principal for global issues at consultancy Control Risks was quoted as saying by Bloomberg.&nbsp;</p>

<p>"More aggressive and expansive use of US sanctions in recent years reinforces this discomfort—and coincides with demands by major emerging markets for a new distribution of global power," he added.&nbsp;</p>

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BRICS nations are leading the Greenback backlash against the global hegemony of the US dollar. A potential new shared currency between them, they say, could shield other member countries from the impact of sanctions such as the ones imposed against Russia by the United States and European countries.

BRICS nations are leading the Greenback backlash against the global hegemony of the US dollar. A potential new shared currency between them, they say, could shield other member countries from the impact of sanctions such as the ones imposed against Russia by the United States and European countries. The foreign ministers of Brazil, Russia, India, China and South Africa met in Cape Town earlier this week. The shared currency for international trade among the bloc's nations was an issue that topped their agenda. The BRICS are looking to “ensure that we do not become victims to sanctions that have secondary effects on countries that have no involvement in issues that have led to those unilateral sanctions,” Naledi Pandor, South Africa’s minister of international relations, told reporters after the meeting. Also read | BRICS-backed New Development Bank invites Saudi Arabia to join the club As part of bloc's efforts to come up with a shared currency, proposals are reportedly being considered by officials at the New Development Bank, the Shanghai-based lender created by BRICS nations, and the BRICS "will be guided to them as to what the future models might be," Pandor said. Greenback backlash: What else is happening? All over the world, a backlash is brewing against the hegemony of the US dollar. Brazil and China recently struck a deal to settle trade in their local currencies, seeking to bypass the US dollar. India and Malaysia have also signed an accord to ramp up usage of the rupee in bilateral trade. Among its allies, France is starting to complete transactions in yuan. Also watch | Gravitas: India asks BRICS to fight for terror × In this sudden wave of agreements aimed at sidestepping the greenback, experts detect a sort of gradual, meaningful action that was missing in the past. For many countries, their reasons for taking these measures are not much different from one another. The US dollar, they say, is being weaponised to push America’s foreign-policy priorities and punish those that oppose them. "Countries have chafed for decades under US dollar dominance," Jonathan Wood, principal for global issues at consultancy Control Risks was quoted as saying by Bloomberg. "More aggressive and expansive use of US sanctions in recent years reinforces this discomfort—and coincides with demands by major emerging markets for a new distribution of global power," he added. WATCH WION LIVE HERE You can now write for wionews.com and be a part of the community. Share your stories and opinions with us here.

Greenback backlash: BRICS 'common currency' targets economic weaponisation of US dollar

<p>The dominance of US dollar in global trade is facing a significant challenge as emerging global economies, such as China and India, step forward to trade in their own currencies. Besides, countries either seen as aligned or neutral by the West in terms of the ongoing Russian offensive in Ukraine, are increasingly banding together to focus on mutual global finance.</p>

<h2><strong>BRICS currency to challenge US dollar's dominance?</strong></h2>

<p>The BRICS (Brazil, Russia, India, China and South Africa) countries are reportedly exploring the creation of a common currency for trade amongst themselves. A new financial arrangement, seen with a potential to translate into a common BRICS currency, could be announced as soon as in August 2023 at the forthcoming BRICS summit in South Africa.</p>

<p>While speaking at the St. Petersburg International Economic Forum event in New Delhi, India, last week, Alexander Babakov, the deputy chairman of Russian parliament the State Duma, said that the plan is to initially transition to using domestic currencies in transactions. Following this, the introduction and circulation of a digital or an alternative form of currency could be explored. The potential introduction of a common BRICS currency is significant given the bilateral differences between India and China due to ongoing military standoff along the Line of Actual Control between the two Asian giants.&nbsp;&nbsp;</p>

<p>Babakov pointed out that the BRICS leaders summit will reveal a preparedness to implement this particular initiative, with work on the project ongoing, Russian news agency Sputnik reported.</p>

<p><strong>ALSO WATCH |&nbsp;Gravitas: India pushes for trade in rupee</strong></p>

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<p>"The US dollar plays a far too dominant role in global finance," Jim O’Neill, the former Goldman Sachs Group Inc. chief economist who coined the acronym BRIC, wrote in a paper published in the Global Policy journal last month.</p>

<p>"Whenever the Federal Reserve Board has embarked on periods of monetary tightening, or the opposite, loosening, the consequences on the value of the dollar and the knock-on effects have been dramatic."</p>

<p>Brazil, Russia, India and China established BRIC in 2009 and the bloc became BRICS a year later when South Africa was admitted.&nbsp;</p>

<p>If it expands to include other "emerging nations with persistent surpluses," a globally fairer, multi-currency global system could emerge, O’Neill said.&nbsp;</p>

<h2><strong>India, China march forward to internationalise their currencies</strong></h2>

<p>India has been making consistent efforts to replace the dollar with rupee as global reserve currency. New Delhi is offering countries facing dollar shortage to settle their trade payments in Indian rupee. The country aims to “disaster proof” countries in its immediate neighbourhood and the one with which it shares significant trade volumes.&nbsp;</p>

<p><strong>ALSO READ |&nbsp;<a href="https://www.wionews.com/south-asia/rupee-and-taka-to-replace-dollar-as-currency-of-exchange-between-india-bangladesh-568558">Rupee and Taka to replace Dollar as currency of exchange between India, Bangladesh</a></strong></p>

<p>China set up its own commodity exchange in Shanghai – the Shanghai International Energy Exchange (INE) in 2018 for oil deliveries from countries such as Iran, Venezuela and Russia. The contracts traded in INE are solely in the Chinese renminbi.&nbsp;</p>

<p><strong>ALSO READ |&nbsp;<a href="https://www.wionews.com/south-asia/sri-lanka-to-use-indian-rupee-for-international-trade-543895">Sri Lanka to use Indian rupee for international trade, more countries aim to follow</a></strong></p>

<p>A potential deal between China and Saudi Arabia to settle trade transactions in renminbi may further push back the US dollar from the oil territory.</p>

<h2><strong>Why uproar against the US dollar's dominance in global trade?&nbsp;</strong></h2>

<p>This is because the US dollar, almost hegemonically, is a dominant force in global finance. This can be best illustrated by the US dollar's status in global oil trading. Most of the trade is denominated in the US dollars even when neither the barrels of crude (in terms of country of origin) nor the parties trading it have anything to do with it.&nbsp;</p>

<p>According to Basel, Switzerland-based Bank for International Settlements, approximately half of global trade is invoiced in US dollars.&nbsp;</p>

<p>This disproportionately large reliance on the US dollar is in spite of the United States accounting for just over a 10th of global trade.</p>

<p>The dollar’s dominance in global trade means the burden of dollar-denominated debt for other nations rises and falls with the exchange rate. This destabilises the economies of the countries with US monetary policy often playing a defining role than its own domestic decisions.</p>

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The dominance of US dollar in global trade is facing a significant challenge as emerging global economies, such as China and India, step forward to trade in their own currencies.

The dominance of US dollar in global trade is facing a significant challenge as emerging global economies, such as China and India, step forward to trade in their own currencies. Besides, countries either seen as aligned or neutral by the West in terms of the ongoing Russian offensive in Ukraine, are increasingly banding together to focus on mutual global finance. BRICS currency to challenge US dollar's dominance? The BRICS (Brazil, Russia, India, China and South Africa) countries are reportedly exploring the creation of a common currency for trade amongst themselves. A new financial arrangement, seen with a potential to translate into a common BRICS currency, could be announced as soon as in August 2023 at the forthcoming BRICS summit in South Africa. While speaking at the St. Petersburg International Economic Forum event in New Delhi, India, last week, Alexander Babakov, the deputy chairman of Russian parliament the State Duma, said that the plan is to initially transition to using domestic currencies in transactions. Following this, the introduction and circulation of a digital or an alternative form of currency could be explored. The potential introduction of a common BRICS currency is significant given the bilateral differences between India and China due to ongoing military standoff along the Line of Actual Control between the two Asian giants. Babakov pointed out that the BRICS leaders summit will reveal a preparedness to implement this particular initiative, with work on the project ongoing, Russian news agency Sputnik reported. ALSO WATCH | Gravitas: India pushes for trade in rupee × "The US dollar plays a far too dominant role in global finance," Jim O’Neill, the former Goldman Sachs Group Inc. chief economist who coined the acronym BRIC, wrote in a paper published in the Global Policy journal last month. "Whenever the Federal Reserve Board has embarked on periods of monetary tightening, or the opposite, loosening, the consequences on the value of the dollar and the knock-on effects have been dramatic." Brazil, Russia, India and China established BRIC in 2009 and the bloc became BRICS a year later when South Africa was admitted. If it expands to include other "emerging nations with persistent surpluses," a globally fairer, multi-currency global system could emerge, O’Neill said. India, China march forward to internationalise their currencies India has been making consistent efforts to replace the dollar with rupee as global reserve currency. New Delhi is offering countries facing dollar shortage to settle their trade payments in Indian rupee. The country aims to “disaster proof” countries in its immediate neighbourhood and the one with which it shares significant trade volumes. ALSO READ | Rupee and Taka to replace Dollar as currency of exchange between India, Bangladesh China set up its own commodity exchange in Shanghai – the Shanghai International Energy Exchange (INE) in 2018 for oil deliveries from countries such as Iran, Venezuela and Russia. The contracts traded in INE are solely in the Chinese renminbi. ALSO READ | Sri Lanka to use Indian rupee for international trade, more countries aim to follow A potential deal between China and Saudi Arabia to settle trade transactions in renminbi may further push back the US dollar from the oil territory. Why uproar against the US dollar's dominance in global trade? This is because the US dollar, almost hegemonically, is a dominant force in global finance. This can be best illustrated by the US dollar's status in global oil trading. Most of the trade is denominated in the US dollars even when neither the barrels of crude (in terms of country of origin) nor the parties trading it have anything to do with it. According to Basel, Switzerland-based Bank for International Settlements, approximately half of global trade is invoiced in US dollars. This disproportionately large reliance on the US dollar is in spite of the United States accounting for just over a 10th of global trade. The dollar’s dominance in global trade means the burden of dollar-denominated debt for other nations rises and falls with the exchange rate. This destabilises the economies of the countries with US monetary policy often playing a defining role than its own domestic decisions. WATCH WION LIVE HERE You can now write for wionews.com and be a part of the community. Share your stories and opinions with us here.

BRICS common currency soon? India, China step up to counter US dollar's dominance

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BRICS' idea of 'common currency', potential expansion creates jitters in the West

Greenback backlash: BRICS 'common currency' targets economic weaponisation of US dollar

BRICS common currency soon? India, China step up to counter US dollar's dominance