Jakarta. President Prabowo Subianto recently raised concerns over currency weaponization when addressing the BRICS bloc, as discussions to shift away from the dollar gained momentum.

Leaders of the BRICS nations are spending their weekend in New Delhi for the group’s summit. The first session saw members urging greater involvement of the Global South or developing nations in world systems. It was then that Prabowo made the currency weaponization remark in front of Russian leader Vladimir Putin and his Chinese counterpart Xi Jinping.

“Our international financial institutions must also evolve. Trade and currency must not be weaponized. They must better respond to the needs of developing countries, including by providing better access to resources,” Prabowo said on Saturday. 

He did not explicitly name examples of how other countries have used currencies to coerce foreign nations.

Prabowo went on to say that BRICS can “mobilize resources for infrastructure and development” to “strengthen the Global South’s capacity to finance its own future”.

In his 8-minute speech, Prabowo called for the Brazil-backed BRICS to pursue cooperation that can help countries build self-reliance. 

“We do not like to be dictated to by any one or two powers. We must be resilient, and then we become really independent,” Prabowo said.

The group adopted a New Delhi Declaration that day. On local currencies, the 45-page document focused on how the BRICS-sponsored New Development Bank (NDB) does its financing. The bank has bankrolled some of the BRICS members' infrastructure and energy projects. 

“We encourage further efforts by the NDB to expand steadily its capacity to mobilize resources, foster innovation, expand local currency …” the statement reads.

Jakarta had previously announced its intention to join the NDB, thus possibly enabling Jakarta to diversify its financing sources. 

Aside from the NDB, the New Delhi Declaration indicated that some progress had been made in studying “the cross-border interoperability of payment and messaging channels”. There are calls for cross-border payments among the BRICS economies, which they believe will be “low-cost and more accessible”.

The Indonesian central bank recently told its BRICS counterparts to scale local currency trade and cross-border QR payment linkages.

Jakarta has been trying to cut down on its reliance on the dollar, even more so as the rupiah continues to face pressure from the greenback. It has fallen past the  Rp 18,0000-per-dollar mark in recent months.

Last year, US President Donald Trump warned that countries aligning with BRICS’ “anti-American policies” could face an extra 10% tariff. The group’s efforts to challenge the dollar’s dominance had ruffled his feathers.

BRICS founding member Russia to this day remains isolated from the world’s financial system. Russian banks are cut off from the SWIFT global financial messaging network due to sanctions over the Ukraine war. 

BRICS brings together Brazil, Russia, India, China, and South Africa. Egypt, Ethiopia, Iran, the United Arab Emirates, and newcomer Indonesia are also in the grouping that makes up roughly 40% of the world’s gross domestic product (GDP).

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