Obviously, the main goal of this decision (reforming of international monetary and financial system by the BRICS countries) is to boost the international importance of the national currencies of the BRICS countries, but basically the greater usage of the national currencies in international settlement and international transactions will clearly increase the demand for these currencies and, possibly, at the expense of the global reserve currency which is the USD.
So I guess one of the targets of this decision is to replace dollar as a settlement currency between these countries. This idea is not new I would say we had similar initiatives on bilateral basis between Russia and China for example or China and other countries.
This decision is a continuation of earlier efforts. Why not? I don’t see any reasons why it shouldn’t be successful, for example the yuan and Russian ruble is already actively used for the international trade between these two countries, Russia and China, and respective currencies of other BRICS can be used in international settlements between other countries as well.
One of the constraining reasons could be that the trade flows between BRICS countries, that happen between China and Brazil or Brazil and India something like that, are not that significant at the moment. I think this decision might, actually, support the extension of international trade between these countries.
WtR