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Brazilian President Luiz Inacio Lula da Silva has said that the BRICS nations remain committed to developing new “transparent and secure” payment platforms to boost their economic integration and reduce “vulnerabilities” in the global market. He was speaking at a meeting of the BRICS Ambassadors (also known as “Sherpas”) on Thursday, (February 27) as the BRICS continue to seek options to boost trade in national currencies and move trade away from the US dollar.
Lula said that Brazil’s BRICS chairmanship this year will strengthen the group’s push for a multipolar world and will contribute to the “development of complementary, voluntary, accessible, transparent and secure payment platforms.”
The BRICS which now includes Brazil, Russia, China, South Africa, Egypt, Ethiopia, India, Indonesia, Iran, United Arab Emirates – has been boosting the use of national currencies in mutual trade.
Lula was referring to numerous threats issued by US President Donald Trump to BRICS since his re-election last November, and stated that “The current protectionist escalation in the area of trade and investment reinforces the importance of measures that seek to overcome obstacles to our economic integration. Increasing payment options means reducing vulnerabilities and costs.”
Lula’s comments imply that BRICS currencies may be traded within the BRICS framework as a basket of currencies fixed on their own internally agreed rates rather than the respective US dollar rates.
Trump has stated that the BRICS push to establish an alternative currency to the US dollar undermines the dominance of the dollar in global trade, a trend he wants to resist. Trump has threatened to cut trade with members of the group if they try “to destroy” the dollar. Earlier this month, he once again pledged massive tariffs on all imports from BRICS countries if they proceed with plans to establish a common currency, and warned last week that “any BRICS state that does so will be charged a 150% tariff (to export goods to the United States).”
Although BRICS members have denied plans to establish a single currency, they have ramped up efforts to reduce reliance on Western currencies in bilateral trade in recent years by using their own currencies instead. In terms of Trump’s threats, there is little the United States can effectively do in preventing the BRICS or any other countries from using their own sovereign currencies. And in any event, the financial restrictions placed upon Russia by cutting it off from the global financial network and preventing trade with Russia in US Dollars was instigated by the United States in the form of sanctions. In the words of Russian President Vladimir Putin, “Russia did not give up the dollar, it was denied its use.”
Moscow has already stated that the US is weakening the dollar itself by politicizing it with the use of sanctions, rendering Trumps threats somewhat meaningless – except for his own domestic audience.
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