The use of local currencies in trade among BRICS members reduces geopolitical risks, the Russian president has said

Russian President Vladimir Putin has said boosting trade settlements in national currencies among the BRICS group is a strategic necessity, adding that a shift from the US dollar would strengthen financial independence and reduce geopolitical risks.

Russia is currently hosting the 16th annual BRICS Summit in the city of Kazan. The group comprises Brazil, Russia, India, China, and South Africa, as well as new members Iran, Egypt, Ethiopia, and the UAE, which joined in January. 

Speaking on Tuesday with the president of the BRICS New Development Bank, Dilma Rousseff, Putin emphasized that the use of local currencies instead of the dollar or euro “helps to keep economic development free from politics as far as possible in the context of today’s world.” 

The unprecedented US-led sanctions campaign against Moscow due to the Ukraine conflict has forced Russia and other BRICS members to seek alternative ways to pursue trade. Russia’s leading banks were excluded from the SWIFT international payment system back in 2022 as part of the restrictions.

Last month, Putin said that Russia was already actively switching to the use of national currencies in cross-border trade with its BRICS partners, and that the group’s members were jointly developing a payment and settlement framework to be used in trading.   

READ MORE: BRICS developing own payment framework – Putin

In August, Russian Prime Minister Mikhail Mishustin said that over 95% of mutual settlements between Russia and its biggest trading partner, China, are carried out using the ruble or yuan.

Earlier this month, Indian Foreign Minister Subrahmanyam Jaishankar said New Delhi was looking to secure its interests and find “workarounds” in settlements with global partners, including Russia.