During an interview at the annual BRICS summit in Johannesburg, which South Africa hosted this year, Finance Minister Enoch Godongwana discussed the possibility of a shared currency among the BRICS nations. Contrary to popular belief that the group might announce a new currency, possibly backed by gold, he clarified that “the topic of a BRICS currency hasn’t come up, not even in casual conversations.” The minister went on to say:
Setting up a common currency presupposes setting up a central bank, and that presupposes losing independence on monetary policies, and I don’t think any country is ready for that.
At the end of the annual BRICS summit, it was announced that six new countries will join the bloc, starting January 1, 2024. The new members include Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates.
A major point of discussion during the summit was the idea of using local currencies for international trade and financial transactions, rather than depending on the U.S. dollar. South Africa’s Finance Minister Enoch Godongwana used the example of trade between South Africa and Botswana to make his point. He noted that the exchange rates between their currencies are well-known, so there’s no reason why each country can’t pay the other in its own currency.
The BRICS leaders emphasized this point in their closing declaration. They highlighted the importance of using local currencies for trade and financial transactions among BRICS nations and their trading partners.