The leaders of the BRICS countries - Brazil, Russia, India, China, and South Africa - are due to meet and discuss the feasibility of adopting a common currency at the upcoming leaders' summit, hosted by South Africa. The adoption of a common currency could help the BRICS nations move away from the reliance on the US dollar and undermine its dominance. In an interview with Bloomberg, South African Minister of International Relations and Cooperation Naledi Pandor highlighted the complexity of the situation and elaborated on the reasons for such measures: “Why can’t we trade in our own currencies? Why are we committed to trading through the dollar?”. Nineteen countries have either applied to join the BRICS economic bloc or have expressed interest in joining, including Saudi Arabia and Iran.

However, the matter should not be taken lightly, as South Africa itself holds a lot of debt in dollars. Nonetheless, if successful, the BRICS alliance could be instrumental in carving out a great share of the global financial market, and asserting its power globally. In fact, the current estimates suggest that BRICS countries are now responsible for about one-third of the global economic output and about 28% of all monetary reserves, thus indicating a potential opportunity for these countries to more broadly use a common currency.

Not everyone agrees with such potential implications, however. Some analysts, such as Bank of America and Dave Ramsey, suggest that the BRICS currency poses only a limited threat to the US dollar. And while it remains uncertain whether the proposal of the common currency will be adopted, it may certainly pressure the US to review and reconsider some of its global financial policies.



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