Sentiment of the market will be the ultimate test for a new global reserve currency that the BRICS member states are considering as an "alternative" to the American dollar, said a leading expert of BRICS affairs.
Addressing a meeting of Indian and Russian experts of international relations, former Ambassador of India to Russia D.B. Venkatesh Varma said on Thursday that national currencies are likely to play a greater role for trade within BRICS, but it is "impractical" to expect them to lead up to "de-dollarisation".
"BRICS is taking a very important initiative in looking at alternatives, because the need for alternatives is very real. But the key issue is how quickly and with what acceptance the alternatives will be put in place in practice. Dollar has been dominant for a very long time. But particularly since February of this year, there is a greater realisation that over-dependence on a single currency — dollar as the global reserve currency — is a factor of increasing risk. But this risk cannot be addressed overnight," said Mr. Varma in his comments.
