BRICS Calls For Enhanced Use Of Local Currencies In Trade Between Member Countries

Moscow: The BRICS ministers of Foreign Affairs met in Russia’s Nizhny Novgorod on Monday and held a plethora of discussions, including an important one on the enhanced use of local currencies in trade and financial transactions between the BRICS countries.

At the meeting, the ministers recognized the need for a comprehensive reform of the global financial architecture.

“They recalled the paragraph 45 of the Johannesburg II Declaration tasking the Finance Ministers and Central Bank Governors of the BRICS countries to consider the issue of local currencies, payment instruments and platforms and to report back to the BRICS Leaders,” according to the Joint Statement.

Further, the foreign ministers reiterated the demand made at COP27 to guarantee that international financial institution reform will prioritise expanding the scope of financing and facilitating easier access to resources.

They anticipated that the 2025 International Bank for Reconstruction and Development shareholder review would be a great success.

As per the Joint statement released by MEA, the leaders also “supported a robust Global Financial Safety Net with a strong quota-based and adequately resourced International Monetary Fund (IMF) at its centre, and also called on “continuing the process of IMF governance reform including creating a new quota formula reflecting the economic size of its membership” during the overall review of quotas.

In accordance with the Sharm El-Sheikh Action Plan of the COP27, which Egypt hosted in November 2022, the Ministers emphasised the necessity of reforming the policies and practices of multilateral development banks (MDBs) in order to increase their lending capacities, to be able to better assist developing countries in financing their needs for development and enhancing their climate action.

India participated in the BRICS Foreign Ministers’ Meeting which began in Russia’s Nizhny Novgorod on Monday, the first assignment for India’s foreign policy under the historic third consecutive term of Prime Minister Narendra Modi.

Dammu Ravi, Secretary (Economic Relations), at the Ministry of External Affairs (MEA), led the Indian side at the BRICS Foreign Ministers’ Meeting.

“The Ministers encouraged the New Development Bank to follow the member-led and demand-driven principle, employ innovative financing mechanisms to mobilise financing from diversified sources, enhance capacity building and knowledge exchange, including with knowledge sources from developing countries, assist member countries in achieving the SDGs and further improve efficiency and effectiveness to fulfil its mandate, aiming to be a premier multilateral development institution for EMDCs,” the Joint Statement read.

They agreed to jointly develop the New Development Bank into a new type of Multilateral Development Bank of the 21st century and urged the Bank to execute its purpose and functions in accordance with the Agreement on the New Development Bank in a fair manner.

“The Ministers expressed their support to the further expansion of the NDB membership and early consideration of applications of BRICS Member countries as per the NDB approved policies,” the statment added.