YEKATERINBURG, Russia, (Reuters) – The leaders of the world’s biggest emerging markets demanded a greater say in the global financial system yesterday at their first summit, but steered clear of any assault on the U.S. dollar’s dominance.
The summit of Brazil, Russia, India and China (BRIC) ended with a short statement by Russian President Dmitry Medvedev and a communique which demanded more power for developing nations in international financial institutions and the United Nations.
But it did not mention two key Moscow initiatives — a smaller role for the U.S. dollar and a supranational reserve currency although a Russian delegation source told Reuters that BRIC finance ministries and central banks were tasked to work on reserve currencies proposals.
“We are committed to advance the reform of international financial institutions, so as to reflect changes in the world economy,” a joint communique issued by the BRIC countries said.
“The emerging and developing economies must have a greater voice and representation in international financial institutions,” it said. “We also believe that there is a strong need for a stable, predictable and more diversified international monetary system.”
In the run-up to the summit, the Kremlin said reserve currencies would be discussed and that the world needed more reserve currencies, including widened International Monetary Fund Special Drawing Rights (SDRs).
But China — which holds nearly $2 trillion in foreign currency reserves — was silent, indicating little unity on any potential challenge to the greenback.
Analysts say the BRIC four are united by strong economic growth in recent years but not much else. Their political standpoints and global priorities differ widely and diplomats question whether the forum can forge strong, united positions.
The U.S. dollar slid yesterday on Russia’s comments, which came a day after Finance Minister Alexei Kudrin said the dollar’s status as the world’s main reserve currency would be unlikely to change in the near term.
