According to an article on Business Insider, the idea of a single currency for BRICS countries has raised concerns among economists, who doubt the possibility of the bloc ever challenging the dominance of the dollar. The leaders of the five developing member countries of BRICS are slated to meet next week to discuss the bloc’s expansion. However, many prominent economists, including those from Goldman Sachs, have criticized the idea of these countries collaborating to create a common currency that could rival the dollar as the global reserve currency.
Brazil, Russia, India, China, and South Africa are advocating for a replacement of the dollar’s dominance in the world and the establishment of a common trade agreement among themselves. Yet, economists find this idea amusing, wondering how they would go about creating a BRICS central bank and whether it is feasible.
At the 15th BRICS Summit, the countries may propose the idea of a single currency in an attempt to undermine the dollar’s dominance in global trade by encouraging the use of alternative currencies. Proponents argue that the dollar’s share in global reserves has decreased over the past 20 years, although the International Monetary Fund (IMF) still reports that it accounts for nearly 60% of global currency reserves.
Critics present a counterargument, stating that it is unlikely for the yuan, yen, or euro to surpass the dollar unless these countries themselves actively promote the use of their currencies in other parts of the world.
Overall, the idea of a single currency for BRICS countries is met with skepticism by economists, who question its feasibility and the potential for it to challenge the dominance of the dollar as the world’s reserve currency.