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Informist, Tuesday, Aug. 5, 2025

 

NEW DELHI – BRICS is not looking to move away from the dollar being the reserve currency but is only exploring alternatives to diversify trade settlements, Dammu Ravi, secretary (economic relations), Ministry of External Affairs, said at an event Tuesday. Ravi said "dollarisation is a real threat" because of how the currency has been used by certain countries to cripple economies by cutting access to funds, among other actions.

"To prevent such a situation in the future, it is better to have an alternative currency through which trade can continue," Ravi said during a panel discussion organised by the intergovernmental organisation here. Volatility in the foreign exchange market is an additional risk to dollarisation, he added.

 

Ravi also said that BRICS will need to evolve on the usage of global currency as the system experiences technlogical shifts like the popularisation of cryptocurrencies and central bank digital currencies. "BRICS is pushing for local currency settlement," Ravi said. Nearly 90% of global trade is settled through the dollar, while those countries part of global south such as China take up the remaining portion. Countries part of BRICS are looking to opt for trade in local currency to serve their own economic interests, he added.

 

The organisation, comprising Brazil, Russia, India, China and South Africa as founding members, has recently come under attack by the Trump administration, which claims BRICS indulges in anti-US activities, such as attempting to move away from the reserve currency and use a BRICS currency instead. 

 

US President Donald Trump went so far as to threaten additional tariffs on countries looking to create an alternative currency and takeaway the dollar's status as the reserve currency. Indian regulators have said that conversations so far have been around increasing trade through the rupee internationally, rather than setting up an alternative currency by the bloc.

 

Reserve Bank of India governor Sanjay Malhotra late last month said that currently there is not much movement on the BRICS currency. "The dollar is going to be here for a longish time because you need some universal cross-border currency, it is serving the purpose," he had said. India is only trying to popularise the rupee, he had added.

Brazil's President Luiz Inacio Lula da Silva last year made a pitch for BRICS nations to increase trade between each other and had said that a BRICS currency can "increases our payment options and reduces our vulnerabilities". However, there is no consensus among BRICS countries on the idea of an alternative currency.

 

India will assume BRICS Presidency at its 18th summit in 2026, taking over from Brazil. Ravi said India's presidency will lay emphasis on digital public infrastructure, trade and economic linkages of the Global South, and will aim to address energy requirements of these countries in a sustainable manner.  End

 

Reported by Anand JC and Priyasmita Dutta

Edited by Deepshikha Bhardwaj

 

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