Common Currency On Agenda for BRICS Summit: SouthAfrica
BRICS banner lifted for the fifth BRICS Summit at the Albert Luthuli International Convention Centre in Durban .Johannesburg — The creation of a BRICS currency will be one of the main topics up for discussion when the group of five emerging nations - Brazil, Russia, India, China and South Africa -- meet in Johannesburg in August, South African officials said this week.
Isaah Mhlanga, chief economist for Rand Merchant Bank, a South African investment bank, told VOA he thought the idea that a BRICS currency could upend the dollar's dominance"any time soon" was"just not founded by any economic fundamentals that we know of." Mhlanga also noted that given the different economic and political systems of the members of BRICS"it's quite difficult to have a common currency." He said although there has long been talk of a single currency for Africa, an actual economic framework for it is"still nowhere to be seen, it's almost impossible."
"I don't know how we would talk of a currency issued by a bloc of countries that are in different geographical locations because currencies are national in nature," he said."For the euro area to arrive at that, they had to establish a treaty where the other countries had to all surrender their currencies."However, some economists think a new currency could be a game-changer.
"A lot of the countries that BRICS trades with... particularly in the global South, they all share one common challenge," he said."The expense, the cost of actually doing trade, the cost associated with fluctuating exchange rates, the dominance of some currencies over others and that sort of thing, access to cheap finance, affordable finance for their infrastructure.
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