The BRICS and the reform of the International Monetary and Financial System

The BRICS and the reform of the International Monetary and Financial System
Speakers: Alexandra Morozkina, Anastasia Podrugina, André Biancarelli

Hosted at the Institute of Economics (Unicamp), the session brings together researchers who examine how BRICS countries are framing alternatives for the international monetary and financial system. The discussion opens with a survey of existing and proposed BRICS initiatives: the New Development Bank (NDB), the Contingent Reserve Arrangement, ideas for an alternative credit-rating approach, local-currency settlement platforms, and possible CBDC interoperability (“BRICS bridge”). A working “map” separates short-term coordination, payment facilitation, and long-term finance to show where each instrument fits.

Presenters outline the currency hierarchy lens: today’s system concentrates liquidity, safety, and pricing power in a few core currencies, imposing asymmetries on peripheral economies. They track why exporters often invoice in USD (liquidity, hedging costs, pass-through) and how that choice transmits Federal Reserve policy and exchange-rate shocks into local prices. Evidence of de-dollarization appears first in sanctions-exposed corridors (e.g., Russia’s trade), but the lecture stresses broader economic motives: lower transaction costs, reduced currency mismatch, and tighter alignment between trade and financing.

On finance, the talk revisits “original sin” (the difficulty of borrowing in domestic currency) and shows gradual progress as BRICS sovereigns deepen local markets. Reserve management is also shifting: the dollar share has declined, while gold holdings and selective use of other currencies have risen amid higher geopolitical and macro uncertainty.

Policy avenues include: building direct FX pairs across BRICS; scaling local-currency lending by the NDB; creating bond funds to add depth and benchmark curves; and exploring commodity invoicing (e.g., grains, platinum, aluminum) in BRICS currencies where market share is large. For the audience in the US, Europe, India, China, and South Africa, the message is not a sudden currency switch but a pragmatic, incremental diversification of payments, funding, and reserves—aimed at lowering frictions and vulnerability while keeping systems interoperable and market-driven.

00:00:00 – Opening & session context
00:03:30 – BRICS initiatives: NDB, CRA, ratings, payments, CBDCs
00:08:00 – A framework: short-term coordination vs. long-term finance
00:12:30 – Currency hierarchy: asymmetries and policy space
00:17:00 – Why firms invoice in USD: liquidity, hedging, pass-through
00:22:00 – De-dollarization signals: trade corridors and pricing effects
00:27:30 – Finance side: “original sin” and local-currency debt markets
00:33:00 – Reserves are changing: dollar share, gold buildup, geopolitics
00:38:00 – Policy tools: FX pairs, NDB LC lending, BRICS bond fund
00:43:30 – Commodities, CBDC interoperability & incremental pathways

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Between August 25 and 26, 2025, the Institute of Economics at Unicamp hosted the 6th edition of the International School on Development Challenges, bringing together researchers, professors, and students from various countries to discuss development challenges amid the climate crisis and growing geopolitical tensions.

This playlist features recordings of the School’s main sessions. The discussions explore topics such as global governance, international financial architecture, ecological transition, innovation systems, multilateralism, and climate justice — with a focus on the perspectives and strategies of countries from the Global South.

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Realização: Instituto de Economia da Unicamp
Coordenação: Prof. Dr. Bruno De Conti
Direção do IE-Unicamp: Prof. Dr. Célio Hiratuka
Apoio: Fapesp. Capes, Unicamp.

#brics #globaleconomy #development #geopolitics #xijinping #trump #bricscurrency #cbdc #dedollarization