So BRICS have agreed to use local currencies rather than the US Dollar for issuing credits or grants to one another. This is a step towards trying to limit the use of the USD (and probably Sterling, Yen as lesser reserve currencies over time) for international transactions.
I wonder whether those involved are aware of the massive currency crisis for Brazil in 1999 (not so very long ago) whereby due to naive currency management the Real suffered a significant currency depreciation.
Or perhaps they should consider the 1998 Russian Rouble default and devaluation? (Yes, this is the one that sparked LTCM’s implosion.)
I would probably focus on wide-spread Chinese manipulation of currency (not to mention massive investment in US Treasury Securities, in Dollars, of course.) Or maybe the lesser-known 1991 Indian currency crisis?
So these are not great currencies to use as a standard for international settlements or trade or grants. Their history has been way more volatile than the US, and the naiveté and irresponsibility o those managing these currencies has been far greater than that of the US.
Finally, these currencies are poor matches for each other. Oil and gas (Russia), industrial production (China), Technology and Services and Agriculture and also some mining (India), Technology and Agriculture (Brazil) have some overlap, but not sufficient to prevent wide divergence in economies and inflation and therefore exchange rates over time. There is actually no point in even including South Africa’s economy in this mix given that we contribute. (China, $10 Trillion, India $4 Trillion, Russia $2.2 Trillion, Brazil $2.2 Trillion and South Africa $0.5 Trillion. In other words less than 3% of the total of BRICS.)
One good thing out of this is that BRICS does seem to be the new in-use acronym, suggesting the world is laughing as hard at the concept as I am.