BRICS can boost local-currency trade with deeper financial markets, stronger banking links: Experts
Experts discussed how BRICS nations can boost trade and investment by deepening domestic financial markets and using local currencies more often for cross-border transactions.
Proposals include linking national payment platforms and exploring interoperability between Central Bank Digital Currencies (CBDCs) to speed up cross-border settlement.
Reducing non-tariff barriers within the bloc was flagged as necessary to meaningfully raise intra-BRICS trade.
The discussion took place alongside the BRICS Finance Ministers and Central Bank Governors (FMCBG) meeting in Mumbai, under India's 2026 BRICS chairship, ahead of the 18th BRICS Summit in New Delhi.
New Development Bank (NDB) and Local-Currency Lending
The New Development Bank is BRICS's principal financial institution, created specifically to reduce reliance on US dollar-denominated multilateral lending. Its General Strategy commits it to progressively raising the share of loans issued in members' own currencies rather than the dollar, which is the institutional expression of the "local-currency trade" push experts are now discussing at the ministerial level.
Key Details
- Agreement establishing the NDB signed 15 July 2014 at the 6th BRICS Summit (Fortaleza, Brazil); entered into force July 2015
- Headquartered in Shanghai; founding members Brazil, Russia, India, China, South Africa contributed $10 billion each ($50 billion initial capital)
- One-member-one-vote structure; no member holds veto power (distinct from the IMF's weighted-quota voting)
- NDB's General Strategy 2022–2026 targets 30% of financing in members' local currencies
- Membership has expanded beyond the founders to Bangladesh, Egypt, UAE, Uruguay, Algeria, and others, with founding BRICS members required to retain at least 55% of voting power
The NDB is the existing institutional vehicle for the "deeper financial markets" and "local currency" cooperation the article describes — its local-currency lending target is a live example of BRICS financial-market deepening already underway.
RBI's Digital Rupee (e₹) and Cross-Border CBDC Interoperability
CBDC interoperability — the ability to settle a cross-border payment directly between two countries' central bank digital currencies — is the technical mechanism the article says can "speed up cross-border payments." India's own CBDC, the e₹ (digital rupee), is at the pilot stage and is central to how India frames its BRICS-level CBDC proposals.
Key Details
- RBI launched the wholesale digital rupee pilot on 1 November 2022 and the retail pilot on 1 December 2022
- Legal basis: RBI Act, 1934, amended by the Finance Act, 2022, which inserted the definition of "currency" to include CBDC
- India participates in the Bank for International Settlements' (BIS) Project mBridge, a multi-CBDC platform for cross-border payments also involving China, Hong Kong, and the UAE, testing settlement without correspondent banks
- RBI's 2025-26 annual report commits to pursuing bilateral and multilateral cross-border CBDC pilots through 2026-27
Experts' call to "explore CBDCs" for BRICS cross-border payments maps directly onto RBI's existing participation in Project mBridge and its stated 2026-27 roadmap for cross-border CBDC pilots — the digital-currency dimension of reducing dollar-dependent settlement.
Reserve Currency Dynamics and the BRICS Contingent Reserve Arrangement
"Local-currency trade" discussions are often mischaracterised as a push for a single "BRICS currency." No such common currency has been adopted; the actual mechanisms are trade invoicing in national currencies (rupee-rouble, yuan-real trade) and the BRICS Contingent Reserve Arrangement (CRA), a currency-swap-based liquidity backstop analogous to (but independent of) the IMF.
Key Details
- CRA established alongside the NDB at the 2014 Fortaleza Summit; total committed size $100 billion (China $41bn, Brazil/India/Russia $18bn each, South Africa $5bn)
- CRA is a system of central bank currency swap lines, not a shared currency or common central bank
- Reserve Bank of India in 2022 issued a framework permitting invoicing, payment, and settlement of exports/imports in Indian Rupees (the "Rupee Trade Settlement" mechanism) via Special Rupee Vostro Accounts
- IMF Special Drawing Rights (SDR) basket (2022 review) still includes USD (~44%), Euro, RMB, Yen, and GBP — RMB's ~12% weight is the closest any BRICS currency has come to reserve-currency status
The article's "local currency trade" framing is about invoicing and settlement infrastructure (RBI's Vostro accounts, CRA swap lines), not a new reserve currency — a distinction UPSC mains answers on de-dollarisation must draw carefully.
- NDB founding capital: $50 billion ($10 billion each, five founding members), signed 15 July 2014, HQ Shanghai
- BRICS CRA: $100 billion swap-line pool, established 2014, China's largest contribution at $41 billion
- RBI digital rupee wholesale pilot launched 1 November 2022; retail pilot 1 December 2022
- India participates in BIS Project mBridge (with China, Hong Kong, UAE) for cross-border multi-CBDC settlement
- RMB's weight in the IMF SDR basket (2022 review): approximately 12.28%
- Discussions held alongside the BRICS FMCBG meeting, Mumbai, September 2026, ahead of the 18th BRICS Summit in New Delhi