New Economic Horizons: BRICS Nations Eye Unified Currency, Spearheaded by Russian-Iranian Initiative
In a groundbreaking move, Russia and Iran are steering efforts to forge a unified currency for the BRICS nations, signaling a significant pivot from traditional reliance on the U.S. dollar in international trade. This initiative has seen over 60% of the duo’s trade transactions being conducted in their national currencies, the ruble and rial.
National Currencies Gain Momentum in Russia-Iran Trade Relations
As reported by Tass, the strategic partnership between Iran and Russia is gaining new ground with their joint endeavor to introduce a common currency within the BRICS economic alliance. Iranian Ambassador to Russia, Kazem Jalali, shed light on this development at the “Russia – Islamic World: Kazan Forum 2024,” held from May 14-19 in Kazan. The forum’s mission is to bolster ties across various sectors between Russian territories and the Organization of Islamic Cooperation (OIC) member states, while also fostering Islamic financial institutions within Russia.
Ambassador Jalali underscored Iran’s proactive role under Russia’s BRICS chairmanship, driving the agenda for a unified currency. Iran’s recent induction into BRICS positions it as a key player in this currency reform, with Jalali stating:
“The creation of a new single currency within the framework of the association is what Russia and Iran are working on.”
He also touched upon the U.S. dollar’s role in sanctions, which has catalyzed the shift towards national currencies for trade settlements. “More than 60% of bilateral trade is in rubles and rials,” Jalali remarked, highlighting the flourishing state of Russian-Iranian relations.
The BRICS bloc, comprising Brazil, Russia, India, China, and South Africa, expanded its roster last year by welcoming Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, and the UAE. This expansion reflects a growing trend among nations to explore trade settlements in their own currencies, moving away from the U.S. dollar. Critics caution that leveraging the USD as a sanctions tool, such as the seizure of Russian assets, could undermine its global reserve currency status.
Iran has been a staunch advocate for a BRICS common currency. At a BRICS assembly in January, Iran championed the idea of a single currency, while Russia and China emphasized trade settlements in local currencies. Some critics suggest that a BRICS unified currency could challenge the U.S. dollar’s supremacy. For instance, “Rich Dad Poor Dad” author Robert Kiyosaki recently predicted that the introduction of a BRICS digital currency might precipitate the U.S. dollar’s downfall. Although discussions about a BRICS common currency were prevalent before last August’s summit, the conversation has since quieted.
What are your thoughts on the potential for a BRICS common currency? Share your insights in the comments below.
