Brazil talks up local currency in the BRICS trade. Brazil’s Foreign Minister, Mauro Vieira, says using local currencies in BRICS trade will make transactions faster and cheaper.
He discussed this on the “Good Morning Minister” TV show, produced by Brazil Communication Company.
Last month, BRICS leaders met in Johannesburg. They asked their finance ministers to explore trade in national currencies.
said this will streamline trade and reduce costs. He added that the idea is not new. Former President Lula also suggested the same during his terms.
Vieira stressed the goal isn’t a new currency but more straightforward trade. He mentioned that trading through a third currency adds costs.
“The plan is to cut these extra charges,” he said.
If countries manage their finances well, this approach can strengthen their currencies, said Vieira.
“It all hinges on each country’s economic health and the amount they trade,” he concluded.
Context
BRICS is an acronym for Brazil, Russia, India, China, and South Africa. These countries formed this group in 2009.
They focus on mutual benefits in various sectors, such as trade and politics. The alliance aims to reduce Western economic dominance.
Brazil has always been a strong voice in BRICS. It has hosted multiple summits and played a key role in decisions.
Former President Lula was especially active in strengthening the BRICS bond. He was one of the first to suggest local currency trade.
The idea of trading in local currencies isn’t new globally. The Eurozone is a prime example, where 19 countries use the euro.
This practice eliminates currency exchange costs and risks.
The BRICS proposal aims to achieve similar benefits within a more diverse group.
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