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Friday, 25 August 2023 08:53

'No one has tabled the issue of a Brics currency, says Godongwana.

By Paul Vecchiatto.

Suggestions that the BRICS group of emerging market powers establish their own currency to reduce their reliance on the dollar aren't under serious consideration and never have been, finance minister said.

"No one has tabled the issue of a BRICS currency, not even in informal meetings," Enoch Godongwana said in an interview on the sidelines of the bloc's annual summit in Johannesburg on Thursday.

"Setting up a common currency presupposes setting up a central bank, and that presupposes losing independence on monetary policies, and I don't think any country is ready for that."

The bloc, which also includes Brazil, Russia, India and China, is evaluating other ways to reduce their reliance on the greenback, including trading directly in their own units and ensuring that the New Development Bank, which they established in 2015, adapts how it raises its funding.

By way of example, when South Africa trades with neighbouring Botswana, which isn't a BRICS member, "We know the rate of exchange between the two currencies, "Godongwana said. "There is no reason why we can't pay them in pula, and they pay us in rands."

The finance minister welcomed a decision by BRICS to extend membership invitations to six more countries because it would give South Africa better access to bigger markets and deepen trade relations between the Global South.

Leaders from Brazil, Russia, India, China and South Africa agreed to expand their BRICS group at a summit being held this week in Johannesburg, South African President Cyril Ramaphosa said. It will be the first expansion since 2010.

"We have consensus on the first phase of this expansion process, and other phases will follow," Ramaphosa said.

The BRICS nations invited top oil exporters Saudi Arabia, Iran, Egypt, Argentina, Ethiopia and the United Arab Emirates to join their bloc in a push to expand its global influence, effective 1 January 2024.

The push for expansion was largely driven by China but had the backing of Russia and South Africa. India was concerned a bigger BRICS would transform the group into a mouthpiece for China, while Brazil was worried about alienating the West.

More than 20 nations from the Global South had formally requested to join ahead of the summit.