Question NW2710 to the Minister of Finance
04 October 2023 - NW2710
Faber, Mr WF to ask the Minister of Finance
(1)(a) What is the position of the National Treasury on the BRICS nations’ proposal to introduce a new currency for cross-border trade and (b) how will this proposal impact the Republic’s economic relations with other countries, particularly the United States (US); (2) given the potential impact of a new BRICS currency on the economic relations of the Republic with the US, what steps will the Government take to ensure that its participation in this initiative does not negatively affect its existing trade relationships with the US and the European Union countries?
Reply:
- (a) & (b)
There is no official proposal to introduce a new BRICS currency at this point.
The current discussion on facilitating trade and finance amongst the BRICS members is captured in the Johannesburg Declaration where BRICS Leaders highlighted the following:
“We stress the importance of encouraging the use of local currencies in international trade and financial transactions between BRICS as well as their trading partners. We also encourage strengthening of correspondent banking networks between the BRICS countries and enabling settlements in the local currencies. We task our Finance Ministers and/or Central Bank Governors, as appropriate, to consider the issue of local currencies, payment instruments and platforms and report back to us by the next Summit”.
In the BRICS Finance Track, Finance Ministers and Central Bank Governors will resume discussions regarding the instruction from the leaders to explore payment instruments and infrastructure of using local currencies for enhance trade.
2. As stated before, BRICS countries are not establishing a BRICS common currency.
To date, the United States and the European Union remain one of the largest trading partners of South Africa. South Africa trade relations with the United States and the European Union are governed by existing trade agreements with these trading partners. Any changes in the trade agreements are negotiated and agreed between the two countries.