Want... Expert says the Chinese renminbi could be an alternative currency to the US dollar for BRICS nations, reports China's Global Times. Jayshree Sengupta, a senior fellow at the Observatory Researcher Foundation, said recently that while considering the three-year China-Russia currency swap deal which was signed in 2014, the time will come when the US dollar is abandoned. As China now trades with all member nations of the South Asian Association for Regional Cooperation and the Association of Southeast Asian Nations, the renminbi should one day be powerful enough to match the dollar.
Russia's Duma approved the deal to establish the New Development Bank, also called the BRICS Development Bank, on Feb. 20. The country estimates it will pledge US$2 billion over time.
Sengupta believes that other governments in the BRICS bloc, also including Brazil, India, China and South Africa, will follow suit and approve deals to establish the bank as the institution is helpful to the development of the region.
The IMF currently provides loans to its member nations under the conditions that these states meet certain criteria such as conducting financial reforms, which may not be consistent with the debtors' national development blueprint. The BRICS Development Bank would not set such criteria for its members, said Sengupta.
The BRICS nations signed an agreement in July last year to establish what is expected to become one of the world's largest multilateral development banks, which is seen to be a potential rival to Western-dominant currency transactions and international loan institutions. Its registered capital is US$100 billion, with US$50 billion of subscribed capital and US$10 billion of paid-in capital. The initial members of the organization would fund the institute over the next seven years.
The institute is open to United Nations members. The bank is to be headquartered in Shanghai.