IP - The New Development Bank (NDB), established by the BRICS group of major emerging countries, is being urged by the South African Finance Ministry to increase local currency fundraising and lending due to Western sanctions against founding shareholder Russia, according to a statement provided to Reuters.

Iran PressAfrica: This call comes ahead of the upcoming BRICS summit in Johannesburg later this month. Finance Minister Enoch Godongwana stated that the agenda will include discussions on increasing the use of local currencies among NDB members, with the goal of mitigating the impact of foreign exchange fluctuations rather than pursuing de-dollarization. 

Godongwana told Reuters, "Most countries that are members of the NDB have been encouraging [it] to provide loans in local currencies. [It is] not doing as much as member countries require, but that is the strategic direction we are pushing the bank [in]." 

The NDB, headquartered in Shanghai, was established in 2014 by Brazil, Russia, India, China, and South Africa (BRICS founding members) to finance infrastructure and sustainable development projects. 

It officially commenced operations in 2015 and has since been joined by Bangladesh, the United Arab Emirates, Egypt, and Uruguay. Saudi Arabia is also currently engaged in membership discussions.

Leslie Maasdorp, Chief Financial Officer of NDB, informed Reuters that the bank aims to increase local currency lending from approximately 22% to 30% by 2026. However, he acknowledged that there are limitations to de-dollarization. "The bank's operating currency is dollars for a very specific reason: US dollars are where the largest pools of liquidity are," Maasdorp explained. He further stated that the bank will determine its currency mix based on member demands while remaining responsive to their needs.

Iran and Argentina applied to join the BRICS bloc after the summit in Ashgabat in June 2022.

"Iran will be able to contribute to the BRICS' operation and benefit the organization." Argentina's President Alberto Fernandez also said at a BRICS+ meeting in Ashgabat that his country wants to become a full member of BRICS.

Iranian Foreign Minister Hossein Amir Abdollahian told a press conference in Cape Town, South Africa, on June 2, 2023, that BRICS has welcomed Iran’s membership in the bloc.

“Given Iran’s geopolitical situation and potential, the main members of BRICS welcomed our country’s membership in this group,” Amir Abdollahian said after the Friends of BRICS meeting was concluded, the Tehran Times’ correspondent who was accompanying the minister said.

Iran’s membership is “seriously considered” by the five countries, he noted.


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