BRICS' Proposal for Common Currency Faces Doubt from Economists
Summary:
Macroeconomists cast doubt on the feasibility of a proposal for BRICS nations to develop a common currency to rival the US dollar, suggesting that it is unlikely to succeed. They argue that creating a gold-backed currency would be challenging and that BRICS nations are more likely to reduce their reliance on the USD by using their own currencies for cross-border payments.
Macroeconomist Lyn Alden has expressed skepticism over the feasibility of a proposal for BRICS nations to develop a common currency, stating that it is unlikely to succeed in challenging the dominance of the US dollar. Alden argues that creating a gold-backed currency for widespread use would be challenging for Brazil, Russia, India, China, and South Africa, and that the model of backing a fractional-reserve banking system with gold is flawed. Instead, Alden suggests that BRICS nations are more likely to reduce their reliance on the US dollar by increasing the use of their own currencies for cross-border payments, particularly the Chinese yuan.
Published At
8/22/2023 5:45:37 AM
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