Reports on a new BRICS currency designed to compete against the US dollar are fundamentally false, according to leaders in South Africa.
In a statement, South Africa’s Department of International Relations and Cooperation (DIRCO) says BRICS is not working on a currency that could be used as an alternative to USD, reports Bloomberg.
According to DIRCO, reports have misinterpreted the intentions of the economic bloc about trade settlements between member nations.
“Recent misreporting has led to the incorrect narrative that BRICS is planning to create a new currency. This is not the case. The discussions within BRICS focus on trading among member countries using their own national currencies.”
In May of last year, reports emerged that BRICS was working on a new currency backed by gold and potentially additional precious metals and assets in a push to abandon the US dollar.
Despite those reports, South Africa is now saying that BRICS has no intention of promoting de-dollarization efforts.
“South Africa supports the increased use of national currencies in international trade and financial transactions to mitigate the impact of foreign exchange fluctuations, rather than focusing on dedollarization. The strengthening of correspondent banking networks and the development of infrastructure for settlements in national currencies could further this aim.”
South Africa’s statements come as President-elect Donald Trump issued an ultimatum against BRICS. Trump says on the social media platform Truth Social that he plans to take severe measures if BRICS creates or backs a dollar alternative.
“The idea that the BRICS Countries are trying to move away from the dollar while we stand by and watch is OVER. We require a commitment from these countries that they will neither create a new BRICS currency, nor back any other currency to replace the mighty US dollar or, they will face 100% tariffs, and should expect to say goodbye to selling into the wonderful US economy.
They can go find another ‘sucker!’ There is no chance that the BRICS will replace the US dollar in international trade, and any country that tries should wave goodbye to America.”
As a whole, BRICS nations have expressed varying levels of support for a common currency, with leaders in Russia and Brazil firmly behind the idea. South Africa is the most conservative, expressing the need for a cautious approach while emphasizing the importance of the US dollar.
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