IMF Has Not Seen Specific Proposal on BRICS Currency

The International Monetary Fund (IMF) has not seen any specific proposal on a common BRICS currency. However, the IMF acknowledges the presence of “slow-moving trends” indicating shifts in the currency composition of reserves and trade. The Fund’s statement followed reports that the BRICS economic bloc is planning to launch a gold-backed currency.

IMF on BRICS Currency

The International Monetary Fund (IMF) was asked during a press conference on Thursday about its position 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 comprise Brazil, Russia, India, China, and South Africa.

Julie Kozack, director of IMF’s Communications Department, replied: “With respect to the way countries, or the currencies in which countries conduct trade, we view that as a decision of the participants involved in the individual transactions. That is, generally, our view.” 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 stated that more broadly: “Shifts in the currency composition of reserves and of trade tend to be relatively slow-moving if we look at history; and, so, we do see some slow-moving trends that are taking place.” She gave an example of the U.S. dollar, stating that the share of the USD in global foreign reserves has declined from around 70% at the end of 1999 to around 58% at the end of last year.

While Russian news outlet RT claimed that the BRICS nations are launching a gold-backed currency, Leslie Maasdorp, vice president and chief financial officer of the New Development Bank, also known as the BRICS Bank, insisted that the BRICS does not have an immediate plan to create a common currency to challenge the dominance of the USD. “The development of anything alternative is indeed a medium to long-term ambition,” he stressed.

The governor of Russia’s central bank said this week that a common BRICS currency requires the consent of many parties, noting that this project is challenging and “will be quite difficult to implement.”

Do you think the BRICS will launch a gold-backed currency that will compete with the U.S. dollar soon? Let us know in the comments section below.