How expanding China-led economic bloc Brics adds to the yuan’s global clout
- Developing economies Russia, Brazil, India and South Africa joined China in welcoming these six new member states into the group’s fold
- Brics members are expected to step up their use of local currencies for trade and development, shunning the globally dominant US dollar
Expanding a China-influenced group of the world’s largest developing economies is expected to give the yuan a stronger role in global trade, and member states are already discussing how to use their own currencies in trade, rather than the dominant US dollar.
Argentina, Egypt, Ethiopia, Iran, Saudi Arabia and the United Arab Emirates, will join existing heavyweights in a group that aims to promote trade and development without an overreliance on developed nations.
Brics finance ministers and central bank governors will report back at the next summit on the potential use of local currencies for trade among member states. The yuan is expected to dominate their discussions because of China’s influence in international trade.
“[China] would be centre stage, because it’s got the biggest economy and does the biggest amount of trade,” said Robert Carnell, the Asia-Pacific regional head of research with ING in Singapore.