18-01-2024, 10:26 PM
19-01-2024, 01:29 AM
19-01-2024, 06:48 AM
What will back the BRICS currency?
Speculation suggests that it could be backed by gold or other rare-earth elements.
The BRICS countries have not yet confirmed the details. The backing of the BRICS currency remains uncertain as it remains in development.
The backing of the currency will play a crucial role in its stability and acceptance in the global economy.
Addressing Exchange Rate Volatility:
Establishing a Fluctuation Band
Exchange rate volatility poses a significant risk to a member nation’s currency within a BRICS currency union. It becomes crucial to establish a fluctuation band within which each member currency should operate to maintain stability.
However, the absence of defined convergence criteria for joining the BRICS currency union complicates the task of determining an appropriate fluctuation band. This issue must be addressed to ensure the smooth functioning of a BRICS currency
Speculation suggests that it could be backed by gold or other rare-earth elements.
The BRICS countries have not yet confirmed the details. The backing of the BRICS currency remains uncertain as it remains in development.
The backing of the currency will play a crucial role in its stability and acceptance in the global economy.
Addressing Exchange Rate Volatility:
Establishing a Fluctuation Band
Exchange rate volatility poses a significant risk to a member nation’s currency within a BRICS currency union. It becomes crucial to establish a fluctuation band within which each member currency should operate to maintain stability.
However, the absence of defined convergence criteria for joining the BRICS currency union complicates the task of determining an appropriate fluctuation band. This issue must be addressed to ensure the smooth functioning of a BRICS currency
19-01-2024, 06:53 AM
So next time may be BRIC currency will fetch better interest rate for fixed deposit say at 5%? 
19-01-2024, 07:13 AM
(19-01-2024, 06:48 AM)moonrab Wrote: [ -> ]What will back the BRICS currency?
Speculation suggests that it could be backed by gold or other rare-earth elements.
The BRICS countries have not yet confirmed the details. The backing of the BRICS currency remains uncertain as it remains in development.
The backing of the currency will play a crucial role in its stability and acceptance in the global economy.
Addressing Exchange Rate Volatility:
Establishing a Fluctuation Band
Exchange rate volatility poses a significant risk to a member nation’s currency within a BRICS currency union. It becomes crucial to establish a fluctuation band within which each member currency should operate to maintain stability.
However, the absence of defined convergence criteria for joining the BRICS currency union complicates the task of determining an appropriate fluctuation band. This issue must be addressed to ensure the smooth functioning of a BRICS currency
USD also not backed by anything right?
19-01-2024, 07:26 AM
(19-01-2024, 07:13 AM)winbig Wrote: [ -> ]USD also not backed by anything right?
Backed by 100 heavy duty printing machines.
19-01-2024, 07:37 AM
(19-01-2024, 07:13 AM)winbig Wrote: [ -> ]USD also not backed by anything right?
The U.S. dollar is still king today, despite recent challenges.
In addition to accounting for the majority of global reserves, the dollar remains the currency of choice for international trade.
Major commodities such as oil are primarily bought and sold using U.S. dollars, and some major economies, including Saudi Arabia, still peg their currencies to the dollar.
Factors that contribute to the dollar’s dominance include its stable value, the size of the U.S. economy, and the United States’ geopolitical heft. In addition, no other country has a market for its debt akin to the United States’, which totals roughly $22.5 trillion. “It’s more helpful to think of U.S. treasuries as the world’s leading reserve asset,” says CFR’s Brad W. Setser.
“It’s hard to compete with the dollar if you don’t have a market analogous to the treasury market.”
19-01-2024, 08:02 AM
(19-01-2024, 07:13 AM)winbig Wrote: [ -> ]USD also not backed by anything right?
Only back by their mouth.（口头承诺）
You lend me $$$, I guarantee will pay you back with interest. This is my IOU to you.
19-01-2024, 08:12 AM
Like all ideas from China to undermine US hegemony this one is poorly conceived.
Here is why.
Most of the world debt us deminominated in USD.
Once they get their hands on some other currency these indebted countries will convert it to USD which they need to pay debts.
This new currency will lose value.
To replace usd, the US economy needs to decline and politicians there debase it badly until nobody wants it and the value goes into secular decline. US is doing just that but other countries are de basing even faster than US.
Here is why.
Most of the world debt us deminominated in USD.
Once they get their hands on some other currency these indebted countries will convert it to USD which they need to pay debts.
This new currency will lose value.
To replace usd, the US economy needs to decline and politicians there debase it badly until nobody wants it and the value goes into secular decline. US is doing just that but other countries are de basing even faster than US.
19-01-2024, 08:17 AM
If Trump wins the election, he will write off the debts they owe to other countries. He is the law.
19-01-2024, 08:21 AM
19-01-2024, 08:31 AM
Creating a common currency is not a new idea.
But if such a currency is ever achieved, it is unlikely to replace the dollar – it would exist in addition to the established dollar-based global monetary system.
It will be a regional initiative rather like the euro.
In the case of Europe, the process from bilateral settlements to a common currency took close to 50 years.
The main institutional achievements were the establishment in 1950 of the European Payments Union, the provision of funds from the US Treasury to cover liquidity shortages as all settlements were in gold or dollar, the establishment of the European currency unit clearing system and the introduction of the euro – first as a clearing currency and later for general public use.
Even at that late stage, proponents of the euro were accused of leapfrogging political agreement by member states.
The Bank for International Settlements acted as clearing agent for the EPU as well as for the ECU.
All Brics member countries have China as their main trading partner and little trade with each other.
Unlike the Europe, all of the Brics members are individual countries far apart, without common political system, common law, demography, national interest.
Russia, China and India still have on going borders conflicts.
South Africa is a loosely united nation. And each members are still unwilling to give up their national currency.
Especially for China, similarly to the UK, holding onto her pound is a better finance strategy than using the Euros as national currency.
China being the 2nd biggest economy heavy weight, would be shocking to give up her well established RMB, in Asia and other part of the Western economy.
Pegging to the renminbi and aligning their bilateral exchange rates would be the first major step.
At the same time, a mechanism would have to be set up to provide credit in renminbi to countries that run trade deficits, such as India and South Africa.
An organisation similar to the EPU and a management agent like the BIS would have to be established.
China would have to shoulder the burden to keep such a clearing system afloat. This means setting up the mechanism and institutions, providing sufficient funds to support a liquidity shortfall and providing a reserve facility to deposit surplus funds.
In addition, it would need to remove obstacles to the fungibility of the renminbi as surplus supply of other currencies should be freely converted into renminbi and used by other countries.
All this would boost the internationalisation of the renminbi and increase the pressure on China to liberalise its financial account.
Both have major ramifications for the country’s domestic monetary policy.
China is already coming to terms with the fallout from using its currency swap agreements to prop up countries in payments difficulties.
So far, China is a long way from the benign neglect which the US adopted to help the Europeans establish their own multilateral clearing system and currency.
But if such a currency is ever achieved, it is unlikely to replace the dollar – it would exist in addition to the established dollar-based global monetary system.
It will be a regional initiative rather like the euro.
In the case of Europe, the process from bilateral settlements to a common currency took close to 50 years.
The main institutional achievements were the establishment in 1950 of the European Payments Union, the provision of funds from the US Treasury to cover liquidity shortages as all settlements were in gold or dollar, the establishment of the European currency unit clearing system and the introduction of the euro – first as a clearing currency and later for general public use.
Even at that late stage, proponents of the euro were accused of leapfrogging political agreement by member states.
The Bank for International Settlements acted as clearing agent for the EPU as well as for the ECU.
All Brics member countries have China as their main trading partner and little trade with each other.
Unlike the Europe, all of the Brics members are individual countries far apart, without common political system, common law, demography, national interest.
Russia, China and India still have on going borders conflicts.
South Africa is a loosely united nation. And each members are still unwilling to give up their national currency.
Especially for China, similarly to the UK, holding onto her pound is a better finance strategy than using the Euros as national currency.
China being the 2nd biggest economy heavy weight, would be shocking to give up her well established RMB, in Asia and other part of the Western economy.
Pegging to the renminbi and aligning their bilateral exchange rates would be the first major step.
At the same time, a mechanism would have to be set up to provide credit in renminbi to countries that run trade deficits, such as India and South Africa.
An organisation similar to the EPU and a management agent like the BIS would have to be established.
China would have to shoulder the burden to keep such a clearing system afloat. This means setting up the mechanism and institutions, providing sufficient funds to support a liquidity shortfall and providing a reserve facility to deposit surplus funds.
In addition, it would need to remove obstacles to the fungibility of the renminbi as surplus supply of other currencies should be freely converted into renminbi and used by other countries.
All this would boost the internationalisation of the renminbi and increase the pressure on China to liberalise its financial account.
Both have major ramifications for the country’s domestic monetary policy.
China is already coming to terms with the fallout from using its currency swap agreements to prop up countries in payments difficulties.
So far, China is a long way from the benign neglect which the US adopted to help the Europeans establish their own multilateral clearing system and currency.