Iran Proposes $10B Joint Reinsurance Fund for BRICS
Iranian President Masoud Pezeshkian advocates for a shift to local currency settlements to reduce geopolitical risk.
Iran proposed a joint reinsurance company with initial capital of $10 billion for BRICS. The fund aims to cover major infrastructure and energy projects. Pezeshkian stated this would boost private-sector confidence. The proposal was made at the BRICS Business Forum. The goal is to reduce reliance on a limited number of currencies.
The Iranian president called for expanded use of national currencies in trade. He argued this makes intra-BRICS trade less vulnerable to political shocks. Pezeshkian positioned Iran as a strategic bridge for the bloc. He cited the country's energy resources and transport links. The New Development Bank should become a principal financing engine.
Local Currency Settlements Reduce Risk
Pezeshkian said the current financial system is vulnerable. This vulnerability stems from concentration in a few currencies. He urged reciprocal settlements and currency risk management mechanisms. These tools would stabilize trade flows. The shift aims to insulate BRICS from external pressure.
The president emphasized the need for operational cooperation. He stated BRICS must move beyond economic potential. This requires integrated networks for trade and investment. The focus is on transforming potential into action. This approach addresses complex geopolitical challenges.
Infrastructure Financing Through Local Credit
The New Development Bank should issue dedicated credit lines. These lines must be denominated in local currencies. Guarantee instruments are needed to attract private capital. This structure supports infrastructure and energy projects. It reduces the cost of capital for members.
Pezeshkian called for deeper integration of trade infrastructure. This includes digitalized customs procedures. Regulatory barriers must be reduced. Cross-border markets need to be strengthened. These measures facilitate smoother trade operations.
Geopolitical Context and Economic Resilience
The world faces increasing geopolitical uncertainty. Supply chain disruptions are common. Economic instruments are used for political pressure. Pezeshkian noted this complex environment. Economic security is linked to national security.
Iran has faced extensive sanctions in recent years. These pressures have intensified due to military actions. The president stated this reveals a key reality. Trade and energy systems are under political pressure. This affects regional and global stability. BRICS must create resilient capacities. No country should disrupt legitimate trade. GN markets/fx (en-US) reported on these developments.
