India supports the formation of a new BRICS payment system to bypass the US dollar for all trade and transactions. Not just India, other BRICS members and developing countries share similar thoughts, said the Indian Institute of Science (IISc) director Narain Roy.
The director expressed his support for the new BRICS payment system saying that India favors the independent trade settling mechanism. If the new payment system is launched, the US dollar will no longer play a dominant role in cross-border transactions. Read here to know how many sectors in the US will be affected if BRICS ditches the dollar for trade.
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India Will Support the New BRICS Payment System: IISc Director
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The BRICS alliance is looking at various ways to end reliance on the US dollar and help local currencies thrive. The launch of a new payment mechanism will hit the first nail in the US dollar’s coffin. Developing nations want to strengthen their native economies and ending ties with the US dollar helps them achieve the feat.
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“In principle, India favors an independent BRICS payments system,” said IISc director Narain Roy. He cautioned that the move must first be discussed among stakeholders before going forward. “But there is a feeling that this issue needs to be discussed systematically by different stakeholders before a decision is taken,” he said.
Roy explained that not just India, but many developing countries are looking towards the formation of a new BRICS payment system. “My understanding is that not just India, several members feel that such a far-reaching decision can’t be taken hurriedly,” he opined.
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The director revealed that the alliance must take it slow and build a payment system that matches everyone’s trade appetite. “BRICS countries don’t want to create a system which may become dysfunctional. Hence the issue will be debated but a final decision is not expected in the near future,” he summed it up.