Local currencies, global trade & US sanctions: PM Modi, Putin & Pezeshkian send a message to Trump
Prime Minister Narendra Modi, Russian President Vladimir Putin and Iranian President Masoud Pezeshkian used the Brics Business Forum leaders’ session on Friday to push for greater economic cooperation, secure trade routes and wider use of local currencies. The remarks came against growing US criticism of Brics’ efforts to challenge dollar dominance, sending a clear message on the grouping’s ambition to strengthen alternatives to the existing global financial order.PM Modi stressed the importance of secure sea lanes and supply routes for global trade, saying India was a “staunch supporter” of freedom of navigation and the safety of seafarers. This comes amid disruptions in the supply route as Strait of Hormuz remains choked amid the ongoing tussle between US, Iran and Israel.“Global trade progress is possible only when sea lanes are secure, supply routes remain open, and seafarers are safe. That is why India is a staunch supporter of freedom of navigation and the safety of seafarers,” PM Modi said.Putin, meanwhile, said the global economy was undergoing “structural” and “profound” shifts, with emerging economies replacing the traditional economic powers that had driven growth in the second half of the 20th century.He said the established economies continued to have strengths including developed infrastructure and technological and scientific advantages, but stressed that the global economic landscape was changing.“Right now, the world is undergoing structural, deep, profound shifts. It is explained by the fact that the so-called old leaders which used to be the vanguard of economic growth in the second half of the 20th century, are being replaced by new engines of growth. When I say old, this is just a formality – all of us understand what we are talking about,” he said.“These so-called old leaders are still in possession of great strong suits and well-developed infrastructure, technological advantages, scientific advantages, scientific schools and so on and so forth. That’s sad, this isn’t the nature of things. This isn’t the nature of humanity and the nature of economy. The world is always changing,” he added.Pezeshkian made a stronger pitch for reducing dependence on major currencies, calling for greater use of national currencies in trade among Brics members.“One of the most important steps is to expand the use of national currencies in trade among the members. This step must be accompanied by the establishment of the necessary instruments for managing currency risks and reciprocal settlements,” he said.He said this should be backed by mechanisms to manage currency risks and reciprocal settlements, while urging the New Development Bank to become a key source of financing for infrastructure and energy projects through local-currency lending and guarantees to attract private capital.“Since the current financial system is vulnerable to political shocks due to its concentration on a limited number of currencies, in order to transform trade cooperation into real investment, the New Development Bank must become the principal engine for financing infrastructure and energy in member countries through dedicated credit lines, financing in local currencies and guarantee instruments for attracting prive capital,” he added.The remarks come against the backdrop of Trump’s criticism of Brics’ efforts to reduce reliance on the dollar. US President Donald Trump had last year warned that Brics countries pursuing moves to challenge the dollar’s dominance could face a 10% tariff, describing the grouping as a “little group” seeking to challenge the US currency.The Brics Business Forum is the grouping’s flagship private-sector platform and is held annually in the host country ahead of the Leaders’ Summit. It brings together business leaders, ministers and heads of state to discuss key issues including trade, investment, finance, technology and development, helping shape the economic agenda of the grouping.
