By Lehlohonolo Lehana.
BRICS is exploring ideas to create a fairer payment system that reduces dependence on dollars, Minister of International Relations Naledi Pandor says.
Pandor was speaking at a BRICS symposium on Geopolitical tension and South Africa’s role in Cape Town on Tuesday.
The next BRICS Summit will be held in Durban this August.
“Moving away from the dollar is increasingly becoming a discussion – it is less against the dollar and more about empowering other currencies. I have not seen it as a negative discussion,” she says.
“It’s about (if) it’s possible to develop a system in which other currencies may be used for international trade – would it be possible for us to trade in our own currencies as India is doing with the rupee in purchasing oil for example.
How do-able is that amongst ourselves as BRICS countries, but also taking it broader what would we need to do.”
“We will see were that goes but for South Africa we will always have regard to our national interest and our economy, but we will not shy away from the discussion,” said Pandor.
BRICS represents more than 40% of the world’s population and almost a third of global economic output, making it one of the world’s most important economic blocs. Several other nations, including Saudi Arabia and Iran, have expressed an interest in joining its ranks.
Despite the slow erosion of dollar hegemony, analysts say the U.S. dollar is not expected be dethroned in the near future — simply because there aren’t any alternatives right now.
BRICS nations passed the Group of Seven economies in 2020 by the purchasing power parity measure and last year were 4% larger. The IMF expects that gap to widen further this decade, even as the G-7 keeps its advantage when measured using market exchange rates.
Data from IMF shows that as of the fourth quarter of 2022, more than 58% of global reserves are held in U.S. dollar — that’s more than double the share of the euro, the second most-held currency in the world.