Can the Ringgit gain international trust within BRICS?

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The Ringgit's Path to International Trust within BRICS Remains Uncertain

Malaysia's engagement with BRICS, irrespective of formal membership, is intertwined with its ongoing efforts to de-dollarise and increase the international use of the ringgit. While the ringgit currently sees greater acceptance in trade settlements with regional partners like Indonesia, Thailand, and China, its broader international trust, particularly within the diverse economic landscape of BRICS, faces significant hurdles. The core challenge lies in establishing the necessary trust for the ringgit against currencies exhibiting high volatility, such as the Russian rouble, Ethiopian birr, and Egyptian pound, especially when a substantial portion of Malaysia's trade occurs outside the BRICS bloc.
Establishing Pre-requisite Trust in the Ringgit

The potential for the ringgit to gain international trust within BRICS is contingent upon Malaysia's ability to foster this trust, a process that requires overcoming inherent currency fluctuations. While trade settlements in the ringgit are primarily concentrated within the Indo-Pacific region, where Malaysia holds more influence over currency stability, extending this to BRICS presents a different set of challenges. The economic and political stability of BRICS member nations, and by extension their currencies, directly impacts the perceived trustworthiness of the ringgit when operating within this bloc.
Trade Concentration Outside BRICS

A significant factor influencing the ringgit's potential within BRICS is the concentration of Malaysian trade with non-BRICS members. This suggests that BRICS may not be the most effective conduit for Malaysia's de-dollarisation objectives. The effectiveness of the ringgit in international trade is thus more closely tied to existing regional trade agreements and established economic relationships rather than its potential within a broader, more heterogenous bloc like BRICS.
The Influence of Other BRICS Currencies

The rise of currencies like the renminbi (RMB) in bilateral trade settlements among BRICS nations raises questions about Malaysia's own currency adoption. Furthermore, the significant voting power held by founding members in institutions like the New Development Bank (NDB) could mirror the influence dynamics seen in existing global financial bodies. This could potentially limit Malaysia's autonomy and influence, impacting the ringgit's standing if it becomes overly reliant on BRICS as a tool for de-dollarisation.

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Can the Ringgit gain international trust within BRICS?

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