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Since the start of the conflict between Russia and Ukraine, Russia has been struck hard by a wave of sanctions and limitations. It appears that the Putin-led nation is elevating its ties to a few allies. The allies now want to create a new currency to counter dollar dominance in the global market.
With the creation of a new currency, relations between Russia, China, India, and the other BRICS nations seem set to strengthen. Brazil, Russia, India, China, and South Africa make up the BRICS, however, some more countries have shown interest in joining the bloc.
The BRICS countries are developing a new payment medium based on a policy that “does not defend the dollar or euro,” according to reports citing Russian senator Alexander Babakov.
Babakov, the deputy chairman of the Russian State Duma, reportedly said the new currency would be backed by rare-earth elements and other commodities in addition to gold. He stated on the sidelines of the India-Russia Business Forum in New Delhi last week that the bloc nations were working on developing a new type of currency with the goal to present its development at the bloc leaders’ summit this year.
READ: Will a new BRICS currency replace the US currency for trade?
The claim was made just a few days before South Africa dispatched senior officials to Russia to speak with President Vladimir Putin’s party about the “recalibration of the global order,” however other officials from the member countries have not yet confirmed it. The upcoming summit is also scheduled to take place in South Africa in August of this year.
The world’s reliance on the US dollar and the Euro may decline as a result of the new currency, according to claims from the Russian state-owned news source Sputnik.
Russian President Putin announced a new foreign policy last week that prioritized China and India. The declaration was made just a few days after Chinese Premier Xi Jinping visited Moscow to strengthen the “no limits” alliance that had been proclaimed the previous year.
Furthermore, the Chinese yuan has supplanted the US dollar as the most traded currency in Russia, according to a Bloomberg article from earlier today. According to data gathered by Bloomberg based on daily transaction records from the Moscow Exchange, the yuan initially overtook the dollar in monthly trading volume in February, and the distinction grew more obvious in March.
READ ALSO: What You Need To Know About BRICS Organisation. (2023)
Before the invasion, the yuan’s trading volume on the Russian market was negligible.
According to the report, the statement said that Russia would “continue to develop a particularly privileged strategic partnership with the Republic of India with a view to enhance and expand cooperation in all areas on a mutually advantageous basis and place special emphasis on increasing the volume of bilateral trade, strengthening investment and technological ties, and ensuring their resistance to destructive actions of unfriendly states and their alliances.”
In addition, it stated that it wanted to prioritize and strengthen its ability to play a global role in organizations like BRICS “to help adapt the world order to the realities of a multipolar world.”
It now needs to be seen if the BRICS countries confirm this assertion made by the Russian politician and if they provide any additional information about the creation of such currency, if any.
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