Senior Fellow, CIGI
On the eve of their meeting with the G8, the G5 group of major emerging economies – Brazil, China, India, Mexico and South Africa – discussed the use of their own currencies to settle trade accounts among themselves, Indian Foreign Secretary Shivshankar Menon told reporters. According to Menon, the suggestion to explore this possibility came from Brazilian President Luis Inacio Lula da Silva.
Menon wanted to clarify that this does not mean the G5 having a new currency or alternative reserve currency. China, Russia, Brazil, France, and to a lesser degree India had expressed an interest in the talks between G5 and G8 leaders due on Thursday including debate on seeking long-term alternatives to the US dollar as the global reserve currency. Brazil and China have, of course, already established arrangements to settle a portion of their trade in their own currencies.