The existing five invite six other nations to join the BRICS bloc, while existing member, Brazil, wants the group to challenge the dollar.
Jinping, South African President Cyril Ramaphosa, Prime Minister of India Narendra Modi and Russia's Foreign Minister Sergei Lavrov pose for a BRICS family photo during the 2023 BRICS Summit at the Sandton Convention Centre in Johannesburg on August 23, 2023. The BRICS bloc have invited six other nations to join.
Mostly because the BRICS bloc has engaged in few significant global initiatives, the announced enlargement caused only ripples of interest in the media. What did gather attention was the simultaneous proposal from Brazilian President Luiz Inacio Lula da Silva for the enlarged group to issue common currency. This prospect renewed recuring speculation that the dollar will soon lose status as the world’s primary medium international exchange and premier reserve currency.
This is not the first time Lula has challenged the dollar. Recently, he pressed the Mercosur bloc of South American countries to establish a common currency and trade in it instead of in dollars. In neither that case nor the BRICS one – especially the BRICS one – is he likely to make much headway. Certainly, Lula cannot arrange both common currencies at once except in the highly unlikely event that the members of the Mercosur and BRICS bloc agree to form around a single currency.
Even among the BRICS membership, agreement on such a step unlikely. Neither China nor Russia nor India seem ready to give up control of their own currencies in the way that several European nations did with the establishment of the euro and the European Central Bank . India Foreign Minister Subrahmanyam Jaishankar has already responded to the proposal in the negative, saying “there is no idea of a BRICS currency.” Russia’s Putin was less blunt but neither did he embrace the idea.
Even in the unlikely event that the BRICS bloc could settle on a common currency, the new unit would have little chance of supplanting the dollar in its global role. Such an arrangement might exclude the dollar a role in trade among the BRICS membership, but even then, any member with an interest in trading outside the bloc – which is all of them – would have to deal in dollars.
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