BRICS Pushes Local Currency Trade to Cut Payment Costs
BRICS finance ministers agreed to accelerate cross-border payment interoperability and local currency settlements. The move aims to reduce reliance on the US dollar in international trade.
BRICS nations have agreed to fast-track the development of interoperable cross-border payment systems. The bloc’s finance ministers and central bank governors issued a joint statement on Friday. They called for practical solutions that are fast, low-cost, and transparent. The goal is to settle trade and investments in local currencies rather than the US dollar. This decision comes ahead of the two-day BRICS Leaders’ Summit in New Delhi.
India’s Commerce Minister Piyush Goyal emphasized the need to link payment systems among member states. He stated that trade should be deep and resilient with diversified supply chains. Goyal noted that trade must not impede the growth of any member state. The joint statement acknowledged ongoing work on payment channel interoperability. It highlighted that there is no one-size-fits-all approach to these financial integrations.
Rupee Settlements Show Sharp Increase
Recent data indicates a significant shift toward local currency transactions in India. In the first three months of the 2026-27 fiscal year, 8.14% of imports were settled in rupees. This amount totaled 1.58 lakh crore Indian rupees. This figure is more than six times the 25,402 crore rupees recorded in April-June 2025. Reserve Bank of India Governor Sanjay Malhotra previously noted significant scope for reducing international payment costs. He highlighted discussions on linking fast payment systems and Central Bank Digital Currencies.
The push for local currency trade coincides with protracted trade talks between India and the United States. President Donald Trump has threatened to impose additional tariffs on BRICS members. He described the grouping as an attempt to destroy the dollar’s status as the global standard. Trump stated that losing the world standard dollar would be akin to losing a major war. The US views the dollar as central to its national identity and economic power.
Dollar Dominance Faces Structural Challenges
BRICS countries maintain that they are not trying to replace the US dollar. They describe their efforts as offering a viable alternative for market efficiency. The US dollar remains the dominant currency for global payment, trade, and investment. Central banks worldwide hold substantial foreign exchange reserves in US-denominated assets. However, diversification toward gold and other assets has accelerated since 2022. This shift followed the US freezing of Russia’s dollar assets after the invasion of Ukraine.
The BRICS Payment Task Force will continue building on ongoing work. The focus is on facilitating practical solutions for cross-border payments. These solutions must be accessible, efficient, and safe. The initiative respects national priorities while acknowledging diverse economic needs. According to GN markets/fx (en-US), this represents a structured approach to financial independence among emerging markets. The move signals a long-term strategic shift in global trade finance mechanisms.
