Russia, which holds the chair of the BRICS grouping this year, has called on its allies to create an alternative to the International Monetary Fund (IMF) to counter political pressure from Western countries ahead of the BRICS summit later this month.
BRICS, which originally included Brazil, Russia, India, and China, has now expanded to include South Africa, Egypt, Ethiopia, Iran, and the United Arab Emirates. BRICS’ top finance and central bank officials are meeting in Moscow this week.
Russian Finance Minister Anton Siluanov, who is hosting the meeting, said the global financial system is controlled by Western countries and the group, which represents 37% of the global economy, needs to make an alternative.
“The IMF and the World Bank are not playing their role. They are not working in the interest of the BRICS countries,” Siluanov said at an event on the first day of the meeting.
“It is necessary to create new conditions or even new institutions similar to the Bretton Woods institutions, but within the framework of our community, within the framework of BRICS,” Siluanov said.
Russia’s foreign exchange reserves in dollars and euros were frozen following its invasion of Ukraine in February 2022 and its financial system was heavily hit by sanctions imposed by the West. The country is cut off from international capital markets.
Russia has recently experienced delays in international transactions with its trading partners, including BRICS member countries, as banks in these countries fear punitive action from Western regulators.
Russia’s central bank governor Elvira Nabiullina has previously talked about a BRICS bridge payments system, which would link member countries’ financial systems, but progress has been slow.
The only financial institution established so far by BRICS countries is the New Development Bank, which was created in 2015 to finance infrastructure and sustainable development projects in BRICS members and other emerging economies.
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