Senior officials from BRICS nations are intensifying efforts to expand trade in local currencies, moving away from reliance on the US dollar, according to an Iranian central bank official.
The initiative aims to reduce exposure to Western financial sanctions and enhance economic sovereignty amid shifting global dynamics under the new US administration led by President Donald Trump.
The BRICS bloc, originally comprising Brazil, Russia, India, China, and South Africa, has expanded to include Iran, the UAE, Indonesia, Ethiopia, and Egypt. These nations have been exploring alternatives to the US dollar to strengthen their economic independence.
Asghar Abolhassani, deputy governor of the Central Bank of Iran (CBI), revealed that Iran and Russia are already implementing local currency exchanges through the ACUMER payment system, a counterpart to the Belgian-based SWIFT system.
In mid-January, the central banks of Iran and Russia signed a joint action plan to facilitate bilateral trade in national currencies, integrate their financial messaging systems, and connect their card payment networks. The agreement is part of broader efforts to reduce dependence on the US dollar and create a more resilient financial infrastructure within the BRICS bloc.
Proposals for financial integration
Abolhassani proposed the creation of an “independent financial body” within BRICS, arguing that the bloc’s economic weight justifies institutional mechanisms to sustain and expand its role. He also suggested establishing a non-banking development institution to research economic and financial challenges and provide policy recommendations.
The adoption of these strategic and operational solutions will undoubtedly transform the international monetary and financial system, fostering deeper banking, financial, and trade ties within BRICS.
The February meeting followed discussions among BRICS central bank governors in Moscow in May 2024, where members agreed to settle trade in national currencies. Iran also proposed the creation of a unified currency for BRICS nations, though the idea remains under consideration.
The BRICS nations’ push to trade in local currencies and develop alternative financial systems represents a significant shift in the global economic landscape. By reducing reliance on the US dollar, the bloc aims to strengthen its economic sovereignty and create a more multipolar financial system.
