Russia Shifts 90% Of BRICS Transactions To Local Currencies

The local currencies of the BRICS already allow to settle 90% of Russia’s transactions with its alliance partners, according to the Kremlin. However, this figure neither represents a collective goal nor a promise by all member countries to abandon the dollar.

Russia already reaches the 90% threshold

From now on, Russia carries out 90% of its financial operations with its BRICS partners in national currencies. Dmitri Peskov, Kremlin spokesperson, disclosed this figure before Indian journalists ahead of the summit organized in New Delhi.

Such a share concerns Russia’s exchanges with other members, including India. However, it does not describe the situation of the entire bloc. It is also a level already reached, but not a target to be included in the future joint declaration.

Four important pieces of information thus help to properly explain this threshold :

• The 90% concern only Russia’s transactions with its BRICS partners ;
• The figure describes a current situation and not a future target ;
• Payments use multiple national currencies, without a common currency ;
• No collective commitment to abandon the dollar has been announced.

Dmitri Peskov stated:

“The use of national currencies is not a dedollarization policy. We are simply doing what best serves our national interests.”

The Kremlin spokesperson attributes this progression to pressures exerted by Western countries. Thus, sanctions and financial restrictions have led Moscow to multiply settlements in rubles, yuan, rupees, and the currencies of its other partners.

The Kremlin refuses to speak of dedollarization

For the Russian Federation, the use of local currencies is first a response to a practical necessity. Hence, Peskov summed up this stance by indicating that Moscow uses its own currencies if some countries prevent it from using theirs.

An increase in bilateral settlements effectively decreases immediate dependence on the dollar. However, it does not mean that the American currency disappears from the entire transaction. The price of goods can still be determined in dollars before its conversion into a national currency.

Companies also have to manage exchange rate fluctuations, the limited liquidity of some currencies, and trade imbalances. A state accumulating a currency that is hard to reuse may face obstacles when repatriating or converting its revenues.

It should also be noted that the BRICS also do not have a single currency comparable to the euro. Each member of the alliance maintains its monetary policy and economic priorities. The bloc is mainly exploring payment systems that could link national currencies and reduce reliance on Western financial infrastructures.

Thus, Peskov’s remarks mark a Russian advance in bilateral exchanges. It does not represent proof that the eleven members already apply the same policy or want to adopt a common timeline regarding dedollarization.

A joint declaration remains uncertain in New Delhi

Russia hopes that the summit on September 12 and 13 will result in a joint declaration. Thus, discussions should cover security, finance, economy, and new technologies. Moscow also wishes to strengthen the image of the BRICS as a pillar of a multipolar world order.

However, the adoption of the text requires consensus. Also, Iran and the United Arab Emirates defend divergent positions on the Middle East crisis. These disagreements had already prevented the group’s foreign ministers from issuing a joint communiqué last May.

The existence of these tensions was acknowledged by Peskov. He offers Russia’s help to facilitate normalization. Furthermore, he believes Indian diplomats can find wording compatible with the interests of both countries.

The alliance now brings together eleven economies following the arrival of Egypt, Ethiopia, Iran, the United Arab Emirates, Saudi Arabia, and Indonesia. This expansion consolidates its weight but also makes compromises more difficult.

The final declaration will allow measuring the degree of agreement on local currencies among the BRICS. In the absence of a common quantified target, the 90% threshold will remain a result specific to Russia’s exchanges.