Leftist former president of Brazil Dilma Rousseff was appointed to lead the BRICS bloc’s new development bank, and she stated that the organisation is progressively moving away from the US currency by promising to make at least 30% of its loans to members in local currencies.The bloc dominated by the Global South is progressively moving away from using the US currency, according to the newly elected president of the BRICS Bank.
The members of the financial institution will get nearly a third (30%) of the loans made by the new development bank in local currency.
The left-leaning former president of Brazil, Dilma Rousseff, assumed control of the New Development Bank (NDB), which has its headquarters in Shanghai, China, in March.
The BRICS nations of Brazil, Russia, India, China, and South Africa founded the NDB in 2014 as a Global South-focused rival to the US-dominated World Bank, which is renowned for forcing neoliberal economic changes on developing nations that impede their progress.
On April 14, Rousseff stated in an interview with China’s top news outlet CGTN that “it is necessary to find ways to avoid currency risks and other problems, such as being dependent on a single currency, such as the US dollar.”
The good news is that a lot of nations are choosing to conduct trade using their own currencies. She cited China and Brazil as two countries that have exchange agreements in place for the RMB (renminbi) and the Brazilian real.
At NDB, we made that a part of our strategy. 30% of our loans will be financed in the currencies of our member countries between 2022 and 2026 since the NDB is required to lend in local currency, Rousseff continued.
The new NDB president emphasised that it would be crucial to assist our nations in preventing dangers associated with currency rates and a lack of funding that limit long-term investments.
Along with the original BRICS nations, Bangladesh, the United Arab Emirates, and Egypt are also NDB members. Numerous other nations have also expressed interest, and Uruguay is also in the process of joining.
Argentina, Iran, and Algeria have submitted formal applications to join the expanded BRICS+ bloc. According to Sergei Lavrov, the Russian Minister of Foreign Affairs, additional countries with an interest include “a number of African countries,” Egypt, Turkey, Saudi Arabia, the United Arab Emirates, Indonesia, Argentina, and Mexico.
Naledi Pandor, the foreign minister of South Africa, disclosed that the BRICS intends to “develop a fairer monetary system” to counteract “the dominance of the dollar” in January.
“The current systems tend to favour very wealthy nations and tend to be a big challenge for countries, like ourselves, who have to pay in dollars, which is much more expensive compared to our different currencies,” she said.
Therefore, I believe that a more equitable structure needs to be created, and we are now discussing this with the BRICS.
