Brazil is still cautious about the use of local currencies in the Brics

The Brazilian government is still cautious about using local currencies for transactions between Brics countries. The theme will be one of the main topics on the agenda of the group’s summit, in Johannesburg, South Africa, which begins this Tuesday (22.Aug.2023), and has even been defended by President Luiz Inácio Lula da Silva (PT). Even so, the Brazilian side sees the issue as something complex, which demands deep technical debate between nations, so it would not be for the short term.

O Poder360 found out that the matter is in the early stages of negotiation and may even appear in the joint declaration, but that as it deals with currencies and requires more complete studies, it will require time from all sides, without implementation in the short term.

India is one of the countries that is interested in carrying out international transactions using its local currency, the rupee. According to the Indian website Money Control, the country could look for key partners for this, such as Brazil, Argentina, South Africa, Senegal and Tanzania.

The theme, within the Brics (group formed by Brazil, Russia, India, China and South Africa), will be one of the main ones at the summit, which takes place from August 22nd to 24th in South Africa. .

India signed a memorandum of understanding last month with the UAE to use the rupee and dirham in bilateral transactions. According to Money Controla similar agreement was discussed with Indonesia during a meeting on the sidelines of the meeting of finance ministers and heads of central banks of the G20 in Gandhinagar (India), in mid-July.

Lula has been advocating the use of local currencies in international transactions to the detriment of the dollar. On a trip to China in April, for example, President he spoke on carrying out trade in the currencies of the BRICS countries.

“Why are all countries obliged to do their trade backed by the dollar? (…) Why not the yen? Why not the real one?”, questioned the Chief Executive at the time. According to Lula, the currency change “it is difficult, because there are people who are not used to it”.

At the end of May, Lula declared that it should be established “a commercial reference unit to reduce dependency on extra-regional currencies”.

Speaking at the 62nd Mercosur Summit, held in Puerto Iguazú (Argentina) in early July, the president defended the creation of a common currency for Mercosur.