IMF Unaware of Specific BRICS Currency Proposal, New Trends Noted
The International Monetary Fund (IMF) clarified its stance on a proposed BRICS currency. While no specific proposal has been brought to their attention, the IMF acknowledges the presence of new "slow-moving trends" that indicate shifts in currency reserves and trade. These comments come in the wake of reports suggesting that the BRICS nations are preparing to introduce a gold-backed currency.
IMF Clarifies its Position on BRICS Currency Amid Speculation
During a press conference on Thursday, the International Monetary Fund (IMF) clarified its stance on the proposed BRICS currency following media reports that the BRICS nations are launching a gold-backed currency that will be formally announced at the economic bloc’s upcoming leaders’ summit in August. The BRICS nations include Brazil, Russia, India, China, and South Africa.
The IMF's Communications Department Director, Julie Kozack addressed the topic and emphasized that decisions regarding currencies used in trade are taken by the participating countries. When questioned about a specific BRICS currency, Kozack stated that the IMF has not received any concrete proposal. The IMF spokesperson added:
"With respect to a particular BRICS currency, we do not have any specific comments on this. We have not seen any specific proposal."
However, she did note that there are broader trends worth considering, saying, "Historically, changes in the currency composition of reserves and trade tend to be gradual. We observe some of these slow-moving trends."
Kozack cited the declining share of the US dollar in global foreign reserves as an example, highlighting a decrease from around 70% in 1999 to approximately 58% last year.
BRICS Currency is a Long-Term Ambition
Contrary to reports from Russian news outlet RT suggesting the imminent launch of a gold-backed currency by the BRICS nations, Leslie Maasdorp, vice president and chief financial officer of the New Development Bank, refuted such claims.
Maasdorp clarified that the BRICS bloc does not have immediate plans to create a common currency that challenges the dominance of the US dollar, emphasizing that any alternative currency development is a long-term ambition.
“The development of anything alternative is indeed a medium to long-term ambition,” he said.
The governor of Russia's central bank expressed the challenges associated with establishing a common BRICS currency. Noting the complexity and the requirement for consent from multiple parties, he described the project as challenging and said it "will be quite difficult to implement."
Will the BRICS eventually introduce a gold-backed currency to rival the US dollar? Please share your thoughts and opinions in the comments section below.
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