There is no doubt; the BRICS is an organization capable of changing the world economic affairs. Members of the BRICS community are the economic powers of the future. Adding to their prospects is the current trend of shrinking economies in the west, and thus the organization holds more glamour.
The BRICS is in a process to chalk out mutually beneficial strategies to withstand the crisis emanating from the recessionary trends in the industrialized countries. As the heads of states of Brazil, Russia, India, China and South Africa meet in New Delhi, the world is watching the movement of the BRICS countries to escape from the current global economic turmoil.
A leading consensus among the BRICS members is enhancing currency cooperation. The Chinese leadership is trying to project the Rnminbi as the future currency of the world. After the global financial crisis of 2008 and with the emergence of the US debt problem, China is vocal against using dollar as a hard currency.
In the last BRICS meeting at Sanya in China, there were preliminary agreements regarding the use of member currencies for cross border loans. Now, ground works are undergoing for the use of national currencies for trade as well.
Of course, the attempts to promote intra-BRICS trade are positive because in the immediate future, high economic growth in the BRICs region may produce more trade. Besides, shrinking of economic size of the western industrialized countries and their protectionist practices will increase the scope for trade among the BRICS members.
But the strategy of currency cooperation without promoting the use of the national currencies in more multilateral platforms has limitations. For Renminbi and other currencies, their status as hard currencies is relevant if they are used by larger number of countries than just four members as in BRICS. Hence, the BRICS currency cooperation at best can be a beginning or a token exercise than an attempt to replace other hard currencies like the US Dollar.