IMF chief seeks more details on BRICS payments system plans

WASHINGTON: The IMF wants to know more about a cross-border payments system discussed by the BRICS group of countries this week and aimed at boosting non-dollar transactions, the Fund’s managing director said Thursday.

The meeting of the BRICS — meaning Brazil, Russia, India, China and South Africa — took place in the Russian city of Kazan at the same time as the annual meetings of the International Monetary Fund (IMF) and the World Bank in Washington.

The BRICS group has expanded significantly since its inception in 2009, and now includes countries such as Iran, Egypt and the United Arab Emirates. Altogether the BRICS coalition accounts for a significant minority of the world’s economic output.

At the Kazan summit, Russia secured a joint declaration encouraging the “strengthening of correspondent banking networks within BRICS and enabling settlements in local currencies in line with BRICS Cross- Border Payments Initiative (BCBPI).”

The system is designed to rival the European-headquartered SWIFT payments system, from which Russia was barred following its 2022 invasion of Ukraine.

Speaking to reporters at the IMF’s headquarters in Washington on Thursday, IMF managing director Kristalina Georgieva said the Fund wanted additional information about the proposed payments system before taking a firm stance on it.

“The idea of having a payments system of a group of countries is not new,” she said.

“What we need to see is more details,” she added. “What is it in this idea? How that may translate into reality? And then we will be able to assess it.”

During her press conference, Georgieva said the Fund was focused on two main objectives going forward: Ensuring inflation rates return to central bank targets without spurring a deep recession; and fixing the current “low growth, high debt path” that many countries are on.