By John Ikani
South Africa’s government has firmly denied any intention to establish a Brics currency, countering claims that arose after U.S. President-elect Donald Trump threatened to impose steep tariffs on bloc members supporting a move away from the U.S. dollar.
“Recent misreporting has led to the incorrect narrative that Brics is planning to create a new currency,” South Africa’s Department of International Relations and Cooperation (Dirco) explained in an official statement.
Read: Trump threatens ‘100% tariffs’ if Brics nations don’t ‘commit’ to dollar
“This is not the case. The discussions within Brics focus on trading among member countries using their own national currencies.”
The rand followed a broader trend among emerging-market currencies, weakening as the dollar gained strength. By mid-morning in Johannesburg, the currency had declined 0.4% to R18.12.
The Brics coalition, comprising Brazil, Russia, India, China, South Africa, and newer entrants like Iran, Egypt, Ethiopia, and the UAE, has long advocated for changes in the international financial architecture. However, no consensus has been reached on introducing a common currency.
Dirco highlighted that the New Development Bank, established by Brics, continues to rely heavily on the U.S. dollar for its financial activities, with over $30 billion already invested in member states and other developing regions.
“South Africa supports increased use of national currencies in global trade and financial dealings to reduce exposure to currency volatility, rather than pursuing de-dollarisation,” Dirco added.
“The expansion of correspondent banking systems and improved settlement infrastructure for national currencies are steps that could advance this approach.”
