BRICS Currency

BRICS is the acronym used for the association of five countries that initially formed BRICS namely Brazil, Russia, India, China and South Africa. The 2024(16th) meet of BRICS Summit in Kazan, Russia, marked a significant change for the block as it was the first summit after BRICS included the six new member countries. Discussing the points of economic trade, cooperation, the event proposed for a common currency for the member nations to use as a medium of exchange and reduce the dominance of dollar in international trade. Dollar being the worldwide currency used as a medium of exchange dominates the international market all the transactions earlier were being done in US dollars. So to prevent the fluctuation of currency and the losses incurred, BRICS currency is being introduced for the member countries. The new member counties that joined BRICS are Argentina, Egypt, Ethiopia, Iran, Saudi Arabia and United Arab Emirates.

More about BRICS

BRICS is currently headquartered in Shanghai, China. Earlier the association was BRIC in the early 2000s when South-Africa was not a part for them. The term “BRIC” was first coined by economist Jim O’Neill where he highlighted the potential economic growth of Brazil, Russia, India, and China. He predicted that these countries would become major players in the global economy. The first official BRIC summit took place in Yekaterinburg, Russia, in June 2009. The leaders of Brazil, Russia, India, and China met to discuss economic cooperation, global governance reform, and strategies for addressing the financial crisis of 2008. South Africa was invited to join the group, and BRIC officially became BRICS. The inclusion of South Africa (in 2010) aimed to represent the African continent and enhance the bloc’s global influence.

Member countries

BRICS represents a systematic association of emerging economies that will contribute to the substantial share of the world’s population and GDP. The BRICS nation also launched the new development bank (NDB) in 2014,headquartered in Shanghai, China. The bank aims to support public and private projects through loans, providing an alternative to Western-dominated financial institutions. The new member countries and their key highlights are are discussed below:

1. Brazil: The largest country in South America, Brazil is known for its agricultural exports, rich natural resources, and diverse economy.
2. Russia: A major player in global energy markets, Russia possesses vast natural resources, particularly oil and gas, and plays a significant role in international security.
3. India: With a rapidly growing economy, India is one of the largest markets in the world, driven by a young population and a burgeoning technology sector.
4. China: The second-largest economy globally, China is a manufacturing powerhouse and a significant investor in infrastructure projects worldwide.
5. South Africa: The only African member, South Africa plays a crucial role in representing the continent’s interests and is a key player in regional and global affairs.
6. New Members (2023):
   • Argentina: An important agricultural exporter with potential for economic growth.
   • Egypt: A key player in North Africa and the Arab world, with a strategic location.
   • Ethiopia: One of the fastest-growing economies in Africa, with a young population.
   • Iran: A major oil producer with strategic importance in the Middle East.
   • Saudi Arabia: The largest oil exporter in the world, influential in global energy markets.
   • United Arab Emirates: A significant financial and trade hub in the Middle East.

Key Institutions

• New Development Bank (NDB): Founded in 2014, the NDB provides loans for infrastructure and sustainable development projects within BRICS and other developing countries. Headquartered in Shanghai, China, the NDB is sometimes viewed as an alternative to institutions like the World Bank.
• BRICS Contingent Reserve Arrangement (CRA): This arrangement, established in 2015, is a financial safety net that offers support to BRICS members during periods of economic instability, helping them manage liquidity and balance of payment crises.

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