Can the ruble become a reserve currency within the BRICS: new trends in the global economy

25 2022 June 15

A few days ago, President Vladimir Putin announced that work had begun on creating a new reserve currency for the countries of the informal BRICS club - Brazil, Russia, India, China and South Africa. The course towards further “de-dollarization” of the world economics can no longer be ignored. Is there any chance that our Russian ruble will become the new reserve currency?

Speaking to the participants of the BRICS Business Forum, Vladimir Putin made the following statement:

The Russian financial messaging system (SPFS) is open for connecting banks from the five countries. There is an expansion of the geography of use of the Russian payment system "Mir". The issue of creating an international reserve currency based on a basket of currencies of our countries is being worked out.

Some new international currency will be created on the basis of a basket of currencies of all five participating countries: the Brazilian real, the Russian ruble, the Indian rupee, the Chinese yuan and the South African rand. However, there are no details on how and by whom exactly its emission and subsequent regulation will be carried out. Strictly speaking, this is the main difficulty in creating a real alternative to the dollar as a means of international settlements. To solve this problem, there are at least two proven methods.

The first is to create some kind of supranational currency: for example, the ECU (ECU) in the European Monetary System, which preceded the emergence of the euro, our transferable ruble within the framework of the Council for Mutual Economic Assistance during the Soviet era, or even the modern monetary surrogate for the SDR (Special Drawing Rights) in the IMF currency. Similar regional currency projects exist today in Latin America and Africa.

The second method involves the use of the currency of one of the countries in the calculations between all members of the association. Given the weight of the economy, this is likely to be China. However, other BRICS countries, in particular, India, which objectively competes with China, may not agree with this outcome. In addition, the use of developing countries as a reserve currency has its negative sides due to their high volatility.

But why not use the Russian ruble as an alternative to the dollar in settlements within the BRICS club? An idea that seemed frivolous just some 4 months ago makes you look at yourself in a new way today.

When numerous experts and analysts previously savagely smashed the idea of turning the ruble into a world reserve currency, they gave the following arguments: the Russian ruble is not widely used and is not of interest to a wide range of people in international trade, the level of economic development and geopolitical influence of our country insufficient, the quality of financial regulation of the Central Bank of the Russian Federation caused them questions, etc. And what do we see now?

After Moscow converted payments for gas with “unfriendly countries” into rubles, our national currency suddenly turned out to be in great demand for paying for “blue fuel”. It suddenly turned out that the real share of the Russian economy in the world does not correspond to the declared 2-3%, and the gigantic GDP figures of the so-called "developed countries" are largely "inflated". Ridiculously, the President of the United States is now complaining to his voters about the “Putin tax”, justifying the incredible increase in motor fuel prices with “Russian aggression”. It was also clearly shown to the whole world that our army can also "make a stir" in Europe, and not just endlessly "menacingly silent."
The Russian Federation did not collapse under the yoke of a colossal number of sanctions from the collective West.

On the contrary, our national currency, instead of being worth 200 rubles for 1 dollar, is getting stronger and stronger in relation to the “American”. All these "highbrow" experts and analysts are already afraid to predict at what point the fall of the dollar and the euro against the Russian ruble will stop. If things go on like this, then the dollar exchange rate - 30 rubles, the euro - 40 rubles will become quite realistic. So the question is, why not the Russian ruble become a new reserve currency, at least within the framework of the BRICS club?

Yes, behind the yuan is China's gigantic GDP, but behind our ruble is all the country's natural resources, and not only them. It will be enough to convert payments into rubles not only for gas, but also for oil, and for timber, and for metals, and for grain, and for weapons, and for the delivery of astronauts to the ISS, and for everything else. And it immediately turns out that our "wooden" is not so wooden, but very much even nothing, and everyone likes it. Why not?

Sergey Marzhetsky
Mikhail Khamin

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Expert_Analyst_Forecaster

-2

25 June 2022 10: 45

There is no BRICS. There is only his mention in the press.
So the question is Can the ruble become a reserve currency within the BRICS? really relevant.
I am in favor of the ruble becoming the reserve currency of the BRICS. Only I have a condition - let me become a member of this organization.
My letter is A. Insert it wherever you want in our BRICS. ABRIX or BRICS. Or BRIAKS. Does every option sound good?
Marzhecki

-2

25 June 2022 11: 20

Quote: Expert_Analyst_Forecaster
I am in favor of the ruble becoming the reserve currency of the BRICS. Only I have a condition - let me become a member of this organization.
My letter is A. Insert it wherever you want in our BRICS. ABRIX or BRICS. Or BRIAKS. Does every option sound good?

I am for every commentator on the portal to have a limit of inappropriate statements, after which he is subject to a ban. First for a week, then for a month, then forever. Why turn discussions of serious topics into clowning?
Who agrees?
1. Expert_Analyst_Forecaster
  
  0
  
  25 June 2022 11: 28
  
  I am for. Is this an appropriate comment or not?
2. k7k8
  
  +1
  
  25 June 2022 11: 42
  
  I am also in favor, provided that this will also apply to authors, as well as a ban on articles without specifying the author.
  By the way, the topic discussed in the article has already been raised quite recently. What's the point of re-chewing?
  1. Marzhecki
    
    -3
    
    25 June 2022 14: 06
    
    I am also in favor, provided that this also applies to the authors.
    
    It's not for you to decide, but for the editors.
    
    also a ban on articles without an author's name.
    
    All articles go with the indication of their author. News without a signature.
    
    By the way, the topic discussed in the article has already been raised quite recently. What's the point of re-chewing?
    
    Where? By whom? Do you consider it possible to determine the editorial policy of the publication?
    1. k7k8
      
      +2
      
      25 June 2022 17: 21
      
      Quote: Marzhetsky
      Where? By whom? Do you consider it possible to determine the editorial policy of the publication?
      
      Here
      https://topcor.ru/26409-putin-anonsiroval-pojavlenie-novoj-rezervnoj-valjuty-stran-briks.html#comment-id-256682
      Any user directly or indirectly influences the policy of the publication (do not you, as a lawyer and journalist, know this). Another question is how the publication itself reacts to this influence. Of course, if topcor.ru adheres to your point of view, then its popularity is appropriate. You are posting here only to amuse your SHV. This is also confirmed by the intensity of the discussion of the issues raised. Look at topwar.ru - maybe you will understand.
      By the way, a suggestion to you, as a person close to the editorial board - is it possible to limit the size of a comment, for example, to a thousand characters? Zadolbali local notebook discussers post other people's sheets in the comments in their entirety.
Bakht

+2

25 June 2022 11: 43

- Why is the ruble not sinking?
How will he drown? He's wooden!
Expert_Analyst_Forecaster

0

25 June 2022 12: 06

I wonder how China will react to the proposal to make the ruble a reserve currency within the framework of the BRICS? Adequate or not? I think it's adequate. That is, no way. Because it won't affect anything. And Russia will be pleased.
Pat Rick

+2

25 June 2022 12: 53

our national currency, instead of being worth 200 rubles for 1 dollar, is getting stronger and stronger in relation to the "American".

There is nothing particularly good about this: the Russian economy is export-oriented, and exporters are interested in a lower ruble exchange rate - 70-75-80 rubles per $1. Again, with such a high exchange rate of the ruble, the budget of Russia does not receive quite large sums. Now the tax period will end, and the ruble will slowly go down.
Finally, the overwhelming majority of the population of Russia absolutely sneezes at the exchange rate of $, they have never seen those dollars in their lives and will never see them; people need to keep prices in stores from growing at such a rate, and this, as you know, is very bad.
Krapilin

+1

25 June 2022 14: 07

work has begun on the creation of a new reserve currency

The concept of "reserve currency" is inherently flawed. For the "owner of the reserve" dictates its terms to everyone else.
Trade between two countries in calculations should be carried out by two - THEM! - currencies.
If A trades with B, why do they both need C-"wrappers"?
Krapilin

+1

25 June 2022 14: 16

And so it was with the dollar:

... The results of the Great Patriotic War for us from 1941 to 1945 or the Second World War for the rest of the world from 1939 to 1945 was an unprecedented financial and economic strengthening of the United States.

Trading for gold both weapons, military equipment and equipment, as well as products and goods of mass civilian consumption in a situation of absolute security for their industry, the Americans accumulated 70% of the world's gold reserves in the bins of their state treasury - almost 21 tons. Now the overriding goal for them - against the backdrop of their military, political and economic power - was to achieve absolute power over all the money in the world.

Already in 1944, in the town of Bretton Woods, New Hampshire, USA, an international monetary and financial conference of the United Nations (UN) was held for: “The development and settlement of international monetary and financial relations after the end of World War II, as well as the formation of the principles of exchange exchange rates.

Within the framework of this conference, delegates from 44 countries signed a special agreement on the creation of special financial institutions to achieve their goals, namely: the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (IBRD), as well as the signing of the General Agreement on Tariffs in Trade (GATT).

The purpose of the IMF was declared as follows: "Maintaining a stable exchange rate of international currencies of allied countries, providing loans in foreign currency to cover the deficit in balance of payments, as well as to expand international trade with an initial authorized capital of 8 billion 800 million dollars."

It sounded, at first glance, quite good intentions. The authorized capital was formed from the contributions of the participating countries of this very fund, but with one obligatory condition: the gold part of the contribution (that is, in the form of real gold) to the IMF from each country must be kept in the ... USA!

In addition, in order to count on cooperation with the IBRD, the country had to first join ... the IMF!

As a result, world trade, currency, credit and financial relations in the world began to function in a new reality. And the reality looked like this: the US dollar was tightly pegged to gold - 0,88571 grams per dollar. The remaining currencies were required to fix their rates against the dollar, and could change them no more than plus or minus 1% of this value.

As a result of the adoption of this monetary system, the United States became, so to speak, the "world banker", and the US dollar became the world's reserve currency.

Now almost all international payment transactions have gone through US-controlled banks for a percentage (intermediation) of transactions. Money began to pour into the American treasury in the full sense of the word - "out of thin air."

A delegation from the USSR also attended this conference.

The head of the Soviet Union, I.V. Stalin, was well aware that the newly organized international financial system creates unilateral benefits only for the United States.

Therefore, the delegation from the USSR participated in this conference completely passively - practically in the role of an outside observer.

And although the head of the Soviet delegation, Deputy People's Commissar for Foreign Trade Stepanov, signed the general document of the conference, in December 1945 Stalin refused to ratify the documents of the Bretton Woods conference in the USSR. And in the long run, he turned out to be absolutely right ...
Jacques sekavar

+2

25 June 2022 18: 50

In the first place for all members of the brix, including China and India, trade with the US and the EU, and therefore it is almost impossible to abandon the dollar and the euro or replace them with another currency.
Slightly more theoretical chances to introduce a new regional currency within the framework of the SCO, EAEU, ASEAN, RCEP, the Silk Road - they combine a larger number of state entities, which means that the share of the renminbi in the combined basket of currencies will be lower, and, accordingly, the possible financial, economic and political dictate China.
The issuers of the new currency may be the NBR, AIIB, or some new structure.
The problem is that the Chinese economy has become the largest in the world and it makes absolutely no sense for it to limit itself and close itself within the framework of any unions or blocs.
If earlier the zone of US interests extended to the whole world, today the same can be said with confidence about China, and if you look through this prism, then as an intermediate stage in the growth of its influence, China may agree to create a regional currency, especially if the US is pushed to this by sanctions .
In any case, the PRC will dominate and determine the policy of the new regional currency, just as the United States dominates and determines the policy of the IMF with its 17% of the capital.
Krapilin

+2

25 June 2022 19: 54

The so-called "reserve currency" is a tool of globalization.
Globalization, on the other hand, is a mechanism for subordinating “weak” economies to “strong” economies and, above all, to the economy whose currency is used as a “reserve” one.
The so-called "block currency" - the same Faberge, only in profile.
The option of getting rid of the "reserve world" currency is simple - countries trade "their" currencies among themselves.
For example?

For example, a state bank is being created in Russia = Russian-Chinese, and in China, respectively = Chinese-Russian. Prices for goods (resources) in foreign trade transactions among themselves, these countries set on the basis of bilateral agreements - and all payments go only through these two banks. Without an intermediary in the form of any other third, "reserve" currency.
Similarly, "joint banks" are created with other "strong" economies.
There won't be many of them. Economies "weak" trade through one or another ONLY state-owned banks according to pre-agreed rules. Because it makes no sense to organize a separate Russian-Papuan bank.
The overall control of the activities of such banks lies with the state Central Bank.

Nevertheless, the so-called "commercial" banks in Russia are being abolished. For they are exclusively parasitic financial structures.
1. Jacques sekavar
  
  0
  
  25 June 2022 23: 33
  
  Globalization is a mechanism for subordinating "weak" economies to "strong" economies.
  
  Strong and weak - a consequence of the uneven development of different state entities, regions, districts, even one settlement.
  
  Prices for goods (resources) in foreign trade transactions among themselves, these countries set on the basis of bilateral agreements - and all payments go only through these two banks. Without an intermediary in the form of any other third, "reserve" currency
  
  To do this, the state must directively set the exchange rate or have a two-tier system - banknotes for internal and external use, have a state plan and a monopoly on foreign trade, regulate pricing and much more, alien to both capitalism and socialism in its Leninist understanding.
  
  All the same, the so-called "commercial" banks in Russia are being abolished.
  
  Financial capital is associated with production, these are two sides of private property, the abolition of which leads to civil war and the collapse of the state
  1. Krapilin
    
    +2
    
    26 June 2022 07: 46
    
    Strong and weak - a consequence of the uneven development of different state entities, regions, districts, even one settlement.
    
    Globalization is, first of all, a policy of dominance, in which the presence of the weak is obligatory. For better assimilation, I will repeat once again - the reserve currency is a mechanism for pursuing such a policy ...
    
    To do this, the state must directively set the exchange rate or have a two-tier system - banknotes for internal and external use, have a state plan and a monopoly on foreign trade, regulate pricing and much more, alien to both capitalism and socialism in its Leninist understanding.
    
    And what, capitalism is an "absolute" and nothing can be "opposed to it that is alien"?
    And what does the Leninist understanding of anything have to do with it, since we are not talking about socialism or some other ... ism, but about the organization of trade between two subjects without the participation of a third party in the process?
    
    Financial capital is associated with production, these are two sides of private property, the abolition of which leads to civil war and the collapse of the state
    
    In the USSR, there was no private ownership of the means of production, and the civil war began and is now going on "in Ukraine" - both due to the collapse of the USSR, and due to the restoration of private ownership of the means of production that occurred after this collapse.