South Africa denies BRICS plans for new currency amid Trump’s tariff threats

The South African government has clarified that there are no plans to create a BRICS currency, following threats from US President-elect Donald Trump to impose 100 per cent tariffs on members of the economic bloc supporting the creation of an alternative to the US dollar.

“Recent misreporting has led to the incorrect narrative that BRICS is planning to create a new currency,” stated South Africa’s Department of International Relations and Cooperation (Dirco). “This is not the case. The discussions within BRICS focus on trading among member countries using their own national currencies,” Caliber.Az reports via foreign media.

The rand weakened along with other emerging-market currencies, as the US dollar strengthened. By 10:20 (GMT+2) in Johannesburg, the South African currency had fallen 0.4 per cent to 18.1283. 

BRICS, which includes Brazil, Russia, India, China, South Africa, as well as Iran, Egypt, Ethiopia, and the UAE, has advocated for reforms in the international financial system but has not agreed on adopting a new currency. The bloc’s New Development Bank continues to rely on the US dollar for investments, which have surpassed $30 billion in BRICS member states and other developing nations, Dirco noted. 

“South Africa supports the increased use of national currencies in international trade and financial transactions to reduce the impact of foreign exchange fluctuations, rather than focusing on de-dollarisation,” the statement read. “Strengthening correspondent banking networks and developing infrastructure for settlements in national currencies could further this aim.” 

Earlier, Brazil's Foreign Ministry dismissed Trump’s remarks as meaningless and provocative, emphasising that after taking office, he will need to consider the established dynamics of the global economy. The discussions by some analysts and media outlets about the BRICS member states creating an alternative to the dollar are not supported by official statements. 

South Africa has repeatedly stated that there are no such discussions taking place, while reputable economists have pointed out that the BRICS nations lack significant economic integration, making the launch of a single currency impossible. Moreover, any potential support from BRICS for the use of the yuan would face opposition from India, a natural competitor to China, which has no intention of adopting its currency.

By Naila Huseynova