The time has not come yet for a common BRICS currency, Russian President Vladimir Putin told BRICS member states at a media interaction. He added that Russia is working with India and other nations towards exploring the use of digital currencies in mutual trade and investments in the 10-nation bloc.
Putin advised for caution in creating a new reserve currency due to differences in the structure and quality of the economies of the BRICS member states. He said these countries should focus on the use of the national currencies, new financial instruments and the creation of an analogue of SWIFT.
“At this point of time it (a BRICS currency) is a long-term prospect. It is not under consideration. BRICS will be cautious and act gradually, move slowly. The time has not come yet,” Putin said at a media interaction on Friday at his official residence in Novo-Ogaryovo, about 50 km from Moscow.
The Russian strongman's remarks came in reply to a question about plans by the BRICS -- a grouping conceived as a geopolitical and geoeconomic counterweight to the West -- to create a reserve currency.
Russia is hosting the 16th annual BRICS summit in the Tatarstan city of Kazan next week. Prime Minister Narendra Modi is scheduled to attend the summit from October 22 to 23.
It will also be the first ever summit of the grouping after its expansion with the entry of Egypt, Ethiopia, Iran, Saudi Arabia and the United Arab Emirates (UAE). Brazil, Russia, India, China and South Africa are the original members of the BRICS.
Replying to a question, Putin said the BRICS was now studying the possibility of expanding the use of the national currencies and creation of instruments that would make such work safe.
In particular, the BRICS states were considering the possibility of using electronic instruments, he added. “We are looking into the possibility of expanding the use of national currencies and settlements, and want to establish the tools that would make this safe and secure enough.” Putin said the grouping will have to come up with a toolkit that will be under the supervision of the respective BRICS institutions.
“It may be another very good step in the development of the global south with our direct active engagement. We will be talking about that during the (Kazan)summit. We are already in consultations with the Chinese and the Indian friends with the Brazilians. Also, we have had a round of consultations with South Africa." On a potential BRICS reserve currency, Putin said the member states needed to work gradually without haste.
The Russian president also underlined the need for establishing relations between the central banks and to ensure reliable exchange of financial information that is independent of those international instruments of international information exchange that introduce “certain restrictions for political reasons and violate the principles of global economy.”
He said he was referring to the formation in BRICS of an analogue of SWIFT, something that “ensures international settlements.” SWIFT provides the main messaging network through which international payments are initiated.
Putin mentioned that Russia, along with other BRICS members, has already been working on a SWIFT-like financial messaging system and the use of national digital currencies in financing high-growth investment projects.
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