Economist Alexis Habiyaremye from the University of Johannesburg says that a proposed common BRICS currency, if used effectively and systematically for all trade transactions between BRICS nations, would “alleviate the burden on these countries to finance” the “disproportionate advantage that the dollar enjoyed in the international monetary system.”
Economist Discusses BRICS Currency’s Prospect of Becoming Global Currency
Economist Alexis Habiyaremye discussed the challenges a common BRICS currency could pose to the U.S. dollar’s global reserve currency status in an interview with Putnik, published Saturday. Habiyaremye is a senior researcher who works for the South African Research Chair in Industrial Development at the University of Johannesburg, South Africa. He holds a Ph.D. in Economics and Policy Studies of Technical Change from the United Nations University/Maastricht University (UNU-MERIT).
Citing the “disproportionate advantage that the dollar enjoyed in the international monetary system,” the economist described: “This exorbitant privilege ensures that other countries end up financing the U.S. deficit because the U.S. federal reserve can simply print money, while other countries have to produce goods and services to have access to the dollars.
There is an increasing trend among countries to reduce their reliance on the U.S. dollar and instead prioritize the use of their national currencies for trade settlements. One notable initiative in this regard is being undertaken by the BRICS countries (Brazil, Russia, India, China, and South Africa). The economic bloc is considering a proposal to establish a shared currency that would decrease member countries’ dependence on the USD.