During a recent interview, the Chief Financial Officer of the New Development Bank of the BRICS economic alliance expressed a “medium to long-term ambition” to build a new global currency that might compete with the US dollar.
Chief Financial Officer Leslie Maasdorp has said that the alliance’s goal is to increase bilateral commerce in national currencies. This alliance consists of Brazil, Russia, India, China, and South Africa.
The abbreviation BRICS refers to the rapidly developing and politically significant economies of the five nations listed above, which together account for more than 40% of the world’s total population. Approximately $56.6 trillion is the group’s total GDP.
He also noted that the Chinese Renminbi has a long way to go before it can really threaten the dollar’s hegemonic position. Maasdorp further emphasised the dollar’s importance to the bank’s operations by noting that the dollar serves as the institution’s “anchor currency” and is reflected in its balance sheet.
This year, the BRICS alliance has received a lot of interest from other countries. Thirteen nations from Asia, Africa, and Latin America have formally addressed the BRICS leadership or made applications to become members, says African Ambassador Anil Sooklal.
A new global currency is on the alliance’s agenda just as HSBC Asset Management issued a dire forecast for the global economy, predicting that the United States will suffer economic headwinds by the year’s end.
The company predicts that the U.S. economy will enter a slump in the fourth quarter of this year and that Europe will face its own economic recession in 2024.
These actions are meant to cut off Russia’s access to international financial markets and cripple its economy. However, some analysts have pointed out that weaponizing the dollar could have unintended consequences, such as increasing the use of alternative payment systems and the demand for safe haven currencies.
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