The BRICS (Brazil, Russia, India, China, and South Africa) meeting was held in Kazan, Russia, concurrently with the annual IMF and World Bank meetings in Washington.
The managing director of the IMF stated on Thursday that the Fund is interested in learning more about a cross-border payments system that was discussed by the BRICS group of nations this week and that aims to increase non-dollar transactions.
The BRICS (Brazil, Russia, India, China, and South Africa) meeting was held in Kazan, Russia, concurrently with the World Bank and International Monetary Fund (IMF) annual meetings in Washington.
Since its founding in 2009, the BRICS group has grown considerably, now comprising nations like Iran, Egypt, and the United Arab Emirates. The BRICS alliance as a whole contributes a negligible portion of global economic production.
A joint statement supporting the “strengthening of correspondent banking networks within BRICS and enabling settlements in local currencies in line with the BRICS Cross-Border Payments Initiative (BCBPI)” was obtained by Russia at the Kazan summit.
The system is intended to compete with the SWIFT payments system, which has its headquarters in Europe and from which Russia was prohibited after its invasion of Ukraine in 2022.
IMF managing director Kristalina Georgieva told reporters at the IMF’s Washington headquarters on Thursday that the Fund wanted more details about the proposed payments system before making a definitive decision.
“It is not a novel concept to have a payment system for a collection of nations,” she stated.
Adding, “What we need to see is more details,” “What is this concept? How might that materialise in the real world? We will then be able to evaluate it.
Suez revenue decline
Georgieva told reporters that the Fund’s two primary goals for the future are to correct the “low growth, high debt path” that many nations are currently on and to make sure inflation rates return to central bank targets without triggering a severe recession.
She also talked about what she referred to as the Middle East tragedy, which she claimed was having an impact on both local populations and regional economies.
According to her, the IMF has downgraded the MENA region by 0.6 percentage points since April. “Egypt is losing 70% of the revenues it used to collect from the Suez Canal because of the impact of the conflict,” she said.
In an apparent allusion to Suez Canal revenues, Egyptian President Abdel Fattah El-Sisi stated earlier this month that the nation had lost “$6-7 billion” this year.
Georgieva also praised the advancements made in aiding nations in financial difficulties, particularly through the Global Sovereign Debt Roundtable (GSDR) forum, which facilitates communication between debtors and distressed nations.
She stated that even though the GSDR was making the debt restructuring process “more predictable and efficient,” more needed to be done.
“To help countries in debt distress get back on their feet faster, we need to do more,” she continued.