The BRICS countries are working on establishing a new reserve currency to better serve their economic interests, according to Pavel Knyazev, Deputy Director of the Russian Foreign Ministry’s Foreign Policy Planning Department. The new currency will be based on a basket of the currencies of the five-nation bloc: the Chinese RMB Yuan, the Russian Ruble, the Indian Rupee, the Brazilian Real and the South African Rand.
“The possibility and prospects of setting up a common single currency based on a basket of currencies of the BRICS countries is being discussed,” Knyazev said during a discussion about expanding BRICS and the Shanghai Cooperation Organization, adding that member states are “actively studying mechanisms” to exchange financial information to develop a reliable alternative for international payments.
In terms of 2022 performance, as of January 5, 2022, the BRICS currencies were trading as follows against the Dollar and Euro:
| US Dollar | Euro | |
|---|---|---|
| Chinese RMB | 6.37 | 7.20 |
| Russian Ruble | 76.69 | 86.75 |
| Indian Rupee | 74.43 | 84.19 |
| South African Rand | 15.89 | 17.98 |
| Brazilian Real | 5.71 | 6.468 |
As of October 4, 2022, the BRICS currency rates against the Dollar and Euro were as follows:
| US Dollar | Euro | |
|---|---|---|
| Chinese RMB | 7.11 | 6.97 |
| Russian Ruble | 55.30 | 58.42 |
| Indian Rupee | 81.51 | 80.48 |
| South African Rand | 17.85 | 17.53 |
| Brazilian Real | 5.16 | 5.07 |
The historic data shows that during the course of this year, the US dollar has depreciated against the Russian Ruble and Brazilian Real, while the Euro has depreciated against all the BRICS currencies.
The BRICS nations had previously said it was working on establishing a joint payment network to cut reliance on the Western financial system. The member countries have also been increasing the use of local currencies in mutual trade. Despite sanctions and SWIFT disconnection, the Russian Ruble has been the strongest performing currency in the world this year, gaining on average over 30% in value.
In the broader terms of de-dollarisation, the member countries of the Shanghai Cooperation Organization (SCO) are serious about switching to settlements in national currencies, but it takes time, according to the Russian presidential envoy for the SCO affairs and Foreign Ministry ambassador-at-large Bakhtiyer Khakimov. The SCO full members include Russia, China, India, Pakistan, Iran, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan, while another 13 countries are involved together with the ASEAN and CIS trade blocs.
Khakimov said that “This is not an easy task. The roadmap for the gradual increase in the share of national currencies in mutual settlements, adopted at the SCO summit in Samarkand, clearly spells out all the stages. Therefore, I do not think that this process will be accelerated, but the intention is serious.”