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- Saudi Arabia is reportedly in discussions to join the BRICS’ New Development Bank (NDB), potentially becoming the ninth member.
- NDB, created as an alternative to the US dollar-dominated global financial system, is examining “alternative instruments and currencies” to increase its resources.
Saudi Arabia Navigates towards BRICS’ New Development Bank
Saudi Arabia, according to recent reports, is currently in negotiations to enter the BRICS’ New Development Bank (NDB), potentially becoming the ninth member of this international institution. Despite the absence of any official comments, the Financial Times reveals that active dialogue is underway between Saudi Arabia and the bank.
Established as an alternative to the global financial system dominated by the US dollar, the NDB aims to foster public and private projects in BRICS nations. The bank offers support through loans, equity participation, and various other financial methods. BRICS, consisting of Brazil, Russia, India, China, and South Africa, could soon witness an increase in membership, with other nations reportedly on the brink of joining.
NDB’s Focus on Diversifying Resources and Currencies
The NDB verified its ongoing discussions with Saudi Arabia, stating,
“In the Middle East, we attach great importance to the Kingdom of Saudi Arabia and are currently engaged in a qualified dialogue with them.”
This comes as Ashwani Muthoo, director-general of the NDB’s independent evaluation office, revealed the bank’s current focus on resource gathering, with fundraising being a paramount concern.
While refraining from commenting on the NDB’s dialogues with Saudi Arabia, Muthoo affirmed that his department is exploring
“alternative instruments and currencies”
to boost the bank’s resources. He added,
“We will have to analyse the Russia situation, the war… these are the kinds of things we’ll have to look at.”
In a recent G7 meeting, Brazilian President Luiz Inácio Lula da Silva proposed the idea of BRICS having its own currency for trade relations between its member countries. He questioned,
“Why can’t an institution like the BRICS bank have a currency to finance trade relations between Brazil and China, between Brazil and all the other BRICS countries? Who decided that the dollar was the [trade] currency after the end of gold parity?”
His remarks point towards the ongoing global dialogue regarding the dominant role of the US dollar in international trade.