Author: Brendan Kelly, former Country Director for China Affairs,  Office of the Secretary of Defense, United States

On June 16, the leaders of Brazil, Russia, India and China met in Yekaterinburg, Russia for the first formal BRIC summit.  The issue topping the meeting agenda was reform of the international financial and monetary system.   The BRICs offered a counterpoint and challenge to the G7/G8, which has served as the world’s economic ‘steering committee’ for the past few decades and meets next month in Italy.   Though light on substance, the BRICs’ message was clear: these growing economies want greater voice and representation in international financial institutions, and to a lesser extent, a greater role for their currencies in the international trade and monetary systems.

Over the past several months, leaders from Russia, China, Brazil and other countries have expressed concerns regarding the value and stability of the dollar, and have called for reducing the world’s dependence on the U.S. currency.  As the BRIC countries account for 42 per cent of global foreign reserves (and amount to about US$2.8 trillion), their pronouncements have produced strong market reactions.   Read more…