Seminar at the Federal University of Rio de Janeiro Featuring Anastasia Podrugina and Alexandra Morozkina
On August 21st, Anastasia Podrugina and Alexandra Morozkina presented at the seminar "Approaches to an Alternative International Monetary System," held at the Institute of Economics of the Federal University of Rio de Janeiro. Anastasia Podrugina, Associate Professor of the School of World Economy, Head of the "Structural Transformation of the World Economy" Sector at CCEIS (Section of Structural Global Economic Problems) and leader of the project "Approaches to an Alternative International Monetary System", discussed the history and underlying reasons for the dollar's dominance in the international financial system, as well as the dynamics of the dollar's share in reserves and settlements. She noted a slow but steady trend of decline in the dollar's share of international reserves, while its share in settlements has remained largely unchanged. Anastasia gave particular attention to the problem of the so-called "original sin" – the inability of developing countries to borrow in their own national currencies. On the one hand, the share of such borrowing increased somewhat after the global financial crisis, but the trend has reversed in recent years.
Alexandra Morozkina, Deputy Dean for Research at the Faculty of World Economy and International Affairs (HSE), continued the theme, focusing on the initiatives of the BRICS group. She noted that the topic of increasing settlements in national currencies has been present in declarations since 2010, but substantive content began to emerge only in 2017. Currently, the main elements of financial infrastructure for increasing the liquidity of national currencies have already been agreed upon – the BRICS Stock Exchange Alliance, the BRICS Bond Fund in national currencies, the New Development Bank (NDB), the Grain Exchange. While most of these initiatives have not yet become fully operational, "the increased interest of all member countries in this topic in recent years gives reason for cautious optimism", Alexandra Morozkina noted.
Rodrigo Vergnhanini, an associate professor at the Institute of Economics, commented on the presentations, noting the peculiarity of Brazil's debt policy, which has allowed it to quickly increase the share of external debt in its national currency, positively impacting the stability of the country's economic situation. In addition, seminar participants discussed the potential role of the New Development Bank in the de-dollarization process of BRICS economies and the dynamics of lending in the national currencies of BRICS countries.