IN 2022, immediately after attacking Ukraine, Russian President Vladimir Putin suggested the idea of "alternative transfer mechanisms" with BRICS partners and an "international reserve currency." Speaking to the BRICS business forum via video link on June 22, 2022, Putin mentioned that Russia was actively redirecting its trade and economic agreements to "reliable partners” such as India, China, and other BRICS nations to counter the crippling sanctions imposed by the European Union, the US, UK, and other Western powers.
Putin is advocating for independence from the US dollar and Euro due to Western sanctions. He argues that these sanctions disregard fundamental principles of a market economy, free trade, and the sanctity of private property. As a result, Russia is seeking new markets and strengthening its ties with nations in Asia and Africa.
BRICS, a bloc fashioned in 2009, aspires to internationally straighten the geopolitical conditions in favour of its member nations' economic, geographic and demographic advantages. To attain this, the bloc founded the multilateral New Development Bank (NDB) in 2015, which assembles resources for infrastructure and projects in emergent markets and developing nations. Previously known as the BRICS Development Bank, NDB is a powerful tool for BRICS to challenge the West's dominance in global financial institutions such as the World Bank or the International Monetary Fund. In line with this aim, the idea of a common BRICS currency has also been proposed.
Impact on Dollar
This story is from the December 2023 edition of Indian Economy & Market.
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This story is from the December 2023 edition of Indian Economy & Market.
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