The leaders of the emerging market BRIC countries have demanded a greater role in the global financial system and an overhaul of the monetary system that relies heavily on the dollar. Can these economies pave the way for exchange traded funds to rally within these countries?
The BRIC (Brazil, Russia, India and China) economies say the global economy relies too heavily on the U.S. dollar, as the leaders of these countries want to lower the importance of the greenback within international financial transactions. A shift in the move toward a multi-currency reserve and trading system is dawning, but there is still a long road ahead for the emerging economies.
David Marsh for MarketWatch reports on some of the action taking place within the BRIC economies:
- Addition of South Africa to the former BRICS format seems to have galvanized the grouping. The five countries agreed to expand use of their own currencies in trade with each other — an important step toward putting the dollar into a new downsized place.
- The BRICS’ state development banks, including the China Development Bank, agreed to use their own currencies instead of the dollar in issuing credit or grants to each other — and they will also phase out the dollar in overall settlements and lending among each other.
- Fresh signs of a disturbing lack of equilibrium in the Chinese economy, have heightened speculation that China will speed up a rise in the renminbi to lower import prices.
Various BRIC ETF Plays:
Tisha Guerrero contributed to this article.