BRICS plan their own precious metals exchange: new rules in the raw materials market?
Preparatory talks have already taken place
At the end of March 2023, the central bank governors of Brazil, Russia, India, China and South Africa met at a BRICS meeting in India to discuss the implementation of the BRICS countries' own precious metals exchange. The aim of the Precious Metals Exchange would be to create a common trading platform for gold and other precious metals and thus reduce dependence on the London market. This would also counteract the influence of Western sanctions on the precious metals market and give the participating countries more control over the global precious metals market.
Russian gold sales to China and India increase sharply
Russia, one of the world's largest gold producers, apparently sold 383.3 tons of gold last year. This is an increase of 18.8% compared to 2021. China and India bought significantly more Russian gold. According to the Russian Ministry of Finance, China and India imported 515.2 and 333.1 tons of Russian gold, respectively, in 2022. This is almost 70% more than in 2021.
Moving away from the US dollar
The BRICS are considering introducing a common currency for mutual trade settlements. This measure should also reduce dependence on the US dollar and thus limit the influence of the US on the global economy.
BRICS bank has been in operation since 2015
The BRICS countries founded their own development bank, the New Development Bank (NDB), in 2015, in order to finance infrastructure projects in member countries and other emerging market countries. According to NDB data, the bank has so far approved 87 projects with a total volume of over 34 billion US dollars.
Political tensions between the West and the BRICS countries
The establishment of a BRICS precious metals exchange is also a result of increasing tensions between the West and the BRICS countries. The sanctions imposed on Russia in particular have led to a reassessment of the previous global financial system. The BRICS countries are therefore increasingly working together to establish their own financial structures and reduce their dependence on the West.
Can the BRICS challenge the West?
The BRICS countries have a combined population of 3.2 billion people and a gross domestic product (GDP) of 27 trillion US dollars. This makes the BRICS an important economic and political force in the world. However, there are also significant differences between the member states, such as economic strength, political systems and foreign policy goals. It remains to be seen whether the BRICS can act with one voice and challenge the West in the long term.
Conclusion
The plans for a BRICS precious metals exchange are a sign of the changing global order. The BRICS countries are increasingly working together to reduce their dependence on the West and establish their own financial structures. It remains to be seen whether the BRICS will succeed in challenging the current global financial system. However, the plans for a precious metals exchange show that the BRICS are serious about increasing their influence in the global economy.
