The New Development Bank, a financial institution created by the BRICS bloc of emerging markets, doesn’t have any immediate plans for the group to create a common currency, its vice president and chief financial officer said.
While the members of BRICS – Brazil, Russia, India, China and South Africa – are pushing to conduct more trade with each other in local currencies, they aren’t ready to challenge the global dominance of the dollar, Leslie Maasdorp said in an interview on Wednesday with Bloomberg TV’s Haslinda Amin.
“The development of anything alternative is more a medium to long-term ambition,” he said. “There is no suggestion right now to create a BRICS currency.”
The bloc, which was formed in 2009, has been striving to gain more clout globally as a way of counterbalancing the dominance the US and its traditional allies have in multilateral financial institutions such as the World Bank and the International Monetary Fund.
Still, even the Chinese Renminbi “is a very long way from becoming a reserve currency,” Maasdorp said.
A key part of BRICS’ strategy is the Shanghai-based New Development Bank, which has $50 billion in subscribed capital and plans to add several new emerging market member countries this year in a bid to expand its lending capability, according to Maasdorp.
Already, in addition to the core BRICS countries, the bank includes Bangladesh and the United Arab Emirates among its members. Uruguay is in the process of joining, and Saudi Arabia has applied too.
“The intention has always been to create a global bank anchored in emerging markets,” Maasdorp said.
Maasdorp also said that the bank aims to direct 40% of lending to climate-related projects.