[Vladimir Putin] also said the increased use of BRICS national currencies for transactions will “minimize geopolitical risks.”
Some of the BRICS countries have wildly volatile currencies either because of governments “printing money” to devalue their currency for economic stimulus for exports or to pay down debts. Alternatively straight up currency manipulation by the sovereign states issuing them. I would think this makes settling transactions in these local currencies a big risk for commerce. You don’t know if the value of the currency you accept tomorrow will be worth what it is today. These are reasons GBP, Euro, and USD are so valuable as currencies, they generally have pretty consistent values.
Here’s where it falls apart, right here:
Some of the BRICS countries have wildly volatile currencies either because of governments “printing money” to devalue their currency for economic stimulus for exports or to pay down debts. Alternatively straight up currency manipulation by the sovereign states issuing them. I would think this makes settling transactions in these local currencies a big risk for commerce. You don’t know if the value of the currency you accept tomorrow will be worth what it is today. These are reasons GBP, Euro, and USD are so valuable as currencies, they generally have pretty consistent values.
Didn’t the Euro even start as being pegged to the dollar at 1:1 to stabilize it in the beginning? Or am I misremembering?
How will this be any worse on BRICS Clear than it currently is on Swift ?
I suspect they’re- Russia- trying to pull a fast one, and china is okay because it won’t hurt them.
Maybe this gives Russians access to reserve currencies that are harder than the ruble.
China is ok with it because they will insist the Renminbi be used as the brics reserve currency.