Foreign ministers from the Brics countries – Brazil, Russia, India, China and South Africa – met in June along with ministers from other countries, including Iran, Egypt, the United Arab Emirates and Saudi Arabia. On the agenda was the possibility of expanding membership of the group to include these countries, and Russia added urgency to the proceedings because of the impact of western sanctions.
But the main topic of discussion was the creation of a common Brics currency. The New Development Bank, rather than the International Monetary Fund, was tasked with finding ideas for how to achieve this. It was hailed by pundits as a major step towards the demise of the dollar.
Russia, Brazil and China are already using their own currencies for bilateral trade payment settlement. However, such a payments system runs into problems once imbalances arise. The comments by Russian Minister of Foreign Affairs Sergei Lavrov that the country is sitting on billions of Indian rupees which it cannot use is a case in point. Brics countries have to find a solution to the perennial problem: how to move from bilateral to multilateral clearing and to a common currency.