Indian external affairs minister doubtful about a single Brics currency

India’s External Affairs Minister Subrahmanyam Jaishankar has expressed scepticism about the Brics grouping adopting a single currency, saying he would not hold his breath over such a development.

Jaishankar told a media briefing in Delhi, India, this week that it was important to be realistic about the extent of alignment among Brics members and that it was more likely that they would continue trading using their own national currencies. 

Several issues would have to be considered before a single unit became a possibility, he added.

“The whole idea is, many of them say, ‘Why do I need a third currency between us?’ which is completely understandable. Sometimes it’s a liquid issue, sometimes it’s a cost issue, it’s an efficiency issue,” he said.

“From time to time, people have raised that there should be a Brics currency but remember for countries to have a common currency, you need an enormous alignment of the very fundamentals of fiscal policies, the monetary policies, economical policies or even have to check the political policies.”

The idea of a single currency was  first mooted in 2011, when South Africa joined Brazil, Russia, India and China as a member of the group, and the government initially backed the idea of a potential counterbalance to the US dollar.

But last year, ahead of a Brics summit hosted by South Africa, Finance Minister Enoch Godongwana said it was premature for the country to enter the discourse about de-dollarisation, underlining that its trade was still largely skewed towards the West.

At last year’s summit, Brics announced the inclusion of Argentina, Egypt, Ethiopia, Iran, Saudi Arabia and the United Arab Emirates in the bloc. Iran, Egypt, Ethiopia and the United Arab Emirates joined on 1 January 2024, while Saudi Arabia is yet to officially do so.

Responding to questions about Israel’s war in Gaza, Jaishankar said India had long supported a two-state solution. 

“We are very concerned about the state of affairs in Gaza and that it is important to create a sustainable humanitarian corridor and relief for, and rehabilitation provided for, people who have been affected by all of this,” he said.

“There is such a thing as international humanitarian law that should be observed.”

The reporter’s visit to Delhi was sponsored by the government of India.