[ The new chief of the BRICS bloc’s New Development Bank,
Brazil’s leftist ex-President Dilma Rousseff, revealed they are
gradually moving away from the US dollar, promising at least 30% of
loans in local currencies of members.]
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BRICS BANK DE-DOLLARIZING, PROMISES 30% OF LOANS IN LOCAL CURRENCIES,
NEW CHIEF DILMA ROUSSEFF SAYS  
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Ben Norton

Geopolitical Economy Report
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_ The new chief of the BRICS bloc’s New Development Bank,
Brazil’s leftist ex-President Dilma Rousseff, revealed they are
gradually moving away from the US dollar, promising at least 30% of
loans in local currencies of members. _

,

 

The new president of the BRICS Bank has revealed that the Global
South-led bloc is advancing toward de-dollarization
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gradually moving away from use of the US dollar.

The New Development Bank plans to give nearly one-third (30%) of its
loans in the local currencies of the financial institution’s
members.

Dilma Rousseff, the left-wing former president of Brazil, took over
the leadership of the Shanghai, China-based New Development Bank (NDB)
this March.

The NDB was created in 2014, by the BRICS bloc of Brazil, Russia,
India, China, and South Africa, as a Global South-oriented alternative
to the US-dominated World Bank, which is infamous for imposing
neoliberal economic reforms on impoverished countries, which hinder
their development.

In an interview with China’s major media outlet CGTN
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explained, “It is necessary to find ways to avoid foreign exchange
risk and other issues, such as being dependent on a single currency,
such as the US dollar”.

“The good news is that we are seeing many countries choosing to
trade using their own currencies. China and Brazil, for instance, are
agreeing to exchange with RMB (renminbi) and the Brazilian real”,
she said.

“At the NDB, we have committed to it in our strategy. For the period
from 2022 to 2026, the NDB has to lend 30% in local currencies, so 30%
of our loan book will be financed in the currencies of our member
countries”, Rousseff added.

“That will be extremely important to help our countries avoid
exchange rate risks and shortages in finance that hinder long-term
investments”, the new NDB president stressed.

Members of the NDB not only include the founders of the BRICS but also
Bangladesh, the UAE, and Egypt. Uruguay is likewise in the process of
joining, and many other countries have expressed interest.

Argentina, Iran, and Algeria have formally applied to join the
extended BRICS+ bloc, and according to the foreign minister of
Russia, Sergei Lavrov [[link removed]], other
nations that are interested “include Egypt, Turkey, Saudi Arabia,
the United Arab Emirates, Indonesia, Argentina, Mexico, and a number
of African nations”.

 

Flags of the members of the BRICS bloc’s New Development Bank (NDB)
South Africa’s foreign minister, Naledi Pandor, revealed in January
that BRICS plans to “develop a fairer system of monetary exchange
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in order to weaken the “dominance of the dollar”.

“The systems currently in place tend to privilege very wealthy
countries and tend to be really a challenge for countries, such as
ourselves, which have to make payments in dollars, which costs much
more in terms of our various currencies”, she said.

“So I do think a fairer system has to be developed, and it’s
something we’re discussing with the BRICS ministers in the economic
sector discussions”, Pandor added.

This April, Brazil’s current president, Lula da Silva, a fellow
member of Dilma’s leftist Workers’ Party, took a historic trip to
China, where he called to challenge US dollar dominance
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While in Shanghai, Lula was the first head of state to visit the NDB
headquarters, where he attended the swearing in ceremony for Dilma.

Lula said the NDB’s goal is “creating a world with less poverty,
less inequality, and more sustainability”.

He added that the bank should play a “leading role in achieving a
better world, without poverty or hunger”.

 

Dilma also commented, “As a former president of Brazil, I know the
importance of the work of multilateral banks to support developing
countries, particularly NDB, in addressing their economic, social, and
environmental needs”.

“Becoming the president of the NDB is undoubtedly a great
opportunity to do more for the BRICS, the emerging markets, and
developing countries”, she said.

 

In her interview with CGTN, Rousseff explained her goals with the
BRICS Bank:
 

It is very important to me that New Development Bank, the bank of the
BRICS, acts as the tool to support the development priorities of the
BRICS and other developing countries.

We need to invest in projects that contribute to three fundamental
areas:

First, we need to support the countries with regards to climate change
and sustainable development goals.

Second, we should promote social inclusion at every opportunity we
have.

And I believe we should finance their most critical and strategic
infrastructure projects.

That said, we want to promote quality development.

Developing countries still don’t have the necessary infrastructure.
They don’t have enough ports, airports, and highways to meet their
needs. And many times, the ones they have are not adequate.

They still have to build alternatives and more modern models of
transportation, for instance.

I see China, a country that has developed capability for alternative
transportation at the scale and quality it needs.

NDB has to support the other countries to also build their quality
infrastructure as well, like high-speed trains.

It is very important to invest in technology and innovation, invest in
universities for example.

Our countries will not overcome extreme poverty if we don’t invest
in education, science, and technology.

When asked what challenges the BRICS and NDB face, Rousseff replied:

The world now is under the threat of high inflation and restrictive
monetary policy, particularly in developed countries.

Such monetary policy means a higher interest rate, and therefore a
higher probability of reduction in growth and a higher probability of
recession.

This presents an important question for the BRICS. We need a
mechanism, a so-called anti-crisis mechanism, which must be
counter-cyclical and support stabilization.

It is necessary to find ways to avoid foreign exchange risk and other
issues, such as being dependent on a single currency, such as the US
dollar.

The good news is that we are seeing many countries choosing to trade
using their own currencies.

China and Brazil, for instance, are agreeing to exchange with RMB
(renminbi) and the Brazilian real.

At the NDB, we have committed to it in our strategy. For the period
from 2022 to 2026, the NDB has to lend 30% in local currencies, so 30%
of our loan book will be financed in the currencies of our member
countries.

That will be extremely important to help our countries avoid exchange
rate risks and shortages in finance that hinder long-term investments.

_[BENJAMIN NORTON is the founder and editor-in-chief of Geopolitical
Economy Report, an independent news website dedicated to publishing
original journalism and analysis._

_Ben has reported from numerous countries, including Venezuela,
Nicaragua, Bolivia, Ecuador, Honduras, Colombia, and more._

_His journalistic work has been published in dozens of media outlets,
and he has done interviews on the BBC, Sky News, Al Jazeera, Democracy
Now, El Financiero Bloomberg, Al Mayadeen, teleSUR, TRT World, CGTN,
Press TV, HispanTV, Sin Censura, and various TV channels in Mexico,
Nicaragua, Venezuela, Ecuador, and Bolivia._

_He was previously a politics staff writer and reporter for Salon and
AlterNet, a regular contributor to the media watchdog Fairness and
Accuracy in Reporting (FAIR).]_

* BRICS
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* NDB
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* New Development Bank
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* Dilma Rousseff
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* dollar
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* inflation
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* Brazil
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* interest rates
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* Lula da Silva
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