South Africa says no plans to develop a common Brics currency
South Africa’s government said there are no plans to create a so-called Brics currency, after US President-elect Donald Trump threatened to impose 100% tariffs on members of the economic bloc that back the creation of an alternative to the US dollar.
“Recent misreporting has led to the incorrect narrative that Brics is planning to create a new currency,” South Africa’s Department of International Relations and Cooperation, known as Dirco, said in a statement. “This is not the case. The discussions within Brics focus on trading among member countries using their own national currencies.”
The rand eased in line with its emerging-market peers, which weakened on the back of renewed dollar strength. The South African currency fell 0.4% to 18.1283 by 10:20 am in Johannesburg.
Brics, which groups developing market powers Brazil, Russia, India, China, South Africa, Iran, Egypt, Ethiopia, and the United Arab Emirates, has called for reforms to the international financial system, while stopping short of agreeing on the adoption of a new currency.
The bloc’s New Development Bank continues to rely on the dollar for its investments, which have exceeded $30-billion in member states and other developing economies, Dirco said.
“South Africa supports the increased use of national currencies in international trade and financial transactions to mitigate the impact of foreign exchange fluctuations, rather than focusing on de-dollarisation,” it said. “The strengthening of correspondent banking networks and the development of infrastructure for settlements in national currencies could further this aim.”
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