New delhi: BRICS countries have committed to promoting the use of local currencies in trade settlements, with the aim of reducing transaction costs and facilitating bilateral trade within the bloc. Shri Sudhakar Dalela, Secretary of Economic Relations at India’s Ministry of External Affairs, disclosed this in a sideline interview during the 18th BRICS Summit in New Delhi on Saturday.
According to News Agency of Nigeria, BRICS is a group of major emerging economies that cooperate on economic, political, and development issues. The name originally represented Brazil, Russia, India, China, and South Africa. By 2026, BRICS will include 11 full members, adding Iran, Egypt, Ethiopia, United Arab Emirates, Saudi Arabia, and Indonesia to its roster.
Dalela mentioned that discussions on local currency settlement have been ongoing among BRICS members, aiming to develop practical mechanisms to facilitate trade. He emphasized that local currency settlement is viewed as a practical mechanism to reduce transaction costs and enhance bilateral trade.
He further explained that local currency settlement is being considered as a complementary mechanism to the existing global payment settlement system. BRICS countries are exploring bilateral arrangements and mechanisms within the BRICS framework to address trade settlement challenges.
Dalela also noted that the broader objective is to facilitate trade, strengthen engagement with the global business community, and reduce transaction costs. He clarified that there is currently no proposal for a common BRICS currency, stating, “There is no proposal for fixed currency as of now.”
Discussions on local currency settlement and other payment mechanisms remain part of ongoing efforts to improve trade and financial cooperation among BRICS countries.