‘South Africa to back renminbi as international currency in BRICS Summit’

March 26th, 2012 - 12:14 am ICT by IANS  

Johannesburg, March 25 (IANS) The South African government will endorse the Chinese renminbi as the new global currency during the incoming BRICS Summit in India, media reports said Sunday.

The South African government will take some steps in the BRICS Summit to challenge the US dollar’s supremacy in the world financial structure, especially in the trade and investment in the emerging markets, reported Xinhua, citing the South African Sunday newspaper City Press.

Using the Chinese currency instead of the US dollars will benefit African businesses to do business with other BRICS memberships by lowering dealing cost in Africa, namely lowering the trade barriers, the report said quoting a research report of South Africa’s largest bank Standard Bank.

The South African government announced on Thursday President Jacob Zuma will attend the fourth BRICS Summit, which will be held on March 28 and 29 in New Delhi under the theme “BRICS Partnership for Global Stability, Security and Prosperity”.

The BRICS consists of Brazil, Russia, India, China and South Africa, and its memberships are among the world’s emerging economic entities.

Standard Bank said the use of renminbi will strengthen South Africa’s position in the BRICS group because it will provide a big gate for the BRICS group to get access to the huge market in the whole African continent.

According to Standard Bank’s research report, at least $100 billion in the bilateral trade between China and Africa will be settled in renminbi by 2015, more than total bilateral trade amount in 2010.

It will also be more convenient for the Chinese businesses to explore trade opportunities in Africa than anywhere else due to most currencies in the African continent are weak and somewhat localized, said the Standard Bank.

The use of renminbi in the emerging economies will not only challenge the US dollar, but also the entire international financial institutions, including the World Bank and the International Monetary Fund, the Standard Bank said.

Fundacao Vargas, a member of the Brazilian delegation to attend the BRICS Summit, was cited as saying the powerful BRICS group could promote the BRICS’ influence in the world by confronting existing unfair global financial structures.

China’s currency should be promoted as a preferred global currency in the international trade as China is expected to rise further financially, said Vargas.

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