What is the rising role of BRICS in financial markets?

The short answer

BRICS started in 2009 as Brazil, Russia, India, China — joined by South Africa in 2010. The 2024 expansion added Egypt, Ethiopia, Iran and the UAE, with Saudi Arabia still considering membership. By 2025, an additional category of “partner countries” further extended the bloc.

The economic weight is real and growing: 35% of world GDP at PPP, around 45% of world population, and 30% of global oil production after expansion. The G7 has fallen below 30% of world GDP at PPP from a 1990 high near 50%.

What’s complicating the simple “BRICS rivals the West” narrative is that the bloc is heterogeneous, dominated by China economically, includes rivals (China-India), and lacks the institutional architecture to function as a coordinated bloc. The financial impact is fragmentation more than substitution.

→ New to deglobalization? Macro-financial regimes framework

What the data shows

The numerical record on BRICS+ economic weight (IMF, IEA, House of Commons, IMF COFER):

• BRICS+ share of global GDP at PPP: approximately 35-37% in 2024 (IMF)
• BRICS+ share of global population: approximately 45-47%
• BRICS+ share of global oil production after expansion: approximately 30%, including Saudi Arabia
• G7 share of global GDP at PPP 2024: approximately 29% (down from ~50% in 1990)
• Yuan share of global FX reserves (COFER): around 2.1% — barely changed since 2022
• NDB lending to BRICS members since 2015: cumulative $35bn+

The exception that nuances the BRICS narrative: despite the bloc’s expansion and de-dollarization rhetoric, the yuan’s share of global reserves has not increased meaningfully since 2022. The fragmentation is real, but it does not consolidate behind a single rival currency. The dollar share has fallen from 71% to 58% over 23 years, but the gainers are smaller currencies (Australian, Canadian, Korean, Norwegian) plus gold — not yuan.

→ Dataset: DXY dataset

Why it happens — the macro mechanism

Three channels explain why BRICS is consequential without being a coherent bloc.

Channel 1: commodity power without monetary substitution. The bloc controls a meaningful share of oil, gas, rare earths, and food production. This gives BRICS+ pricing power over commodities and the ability to settle internal trade in non-dollar currencies (yuan, rupee, ruble). But controlling supply does not create reserve-currency status; reserve status requires deep, liquid, freely-convertible bond markets, which BRICS members do not provide.

Channel 2: NDB and partial financial infrastructure (the underestimated pillar). The New Development Bank, founded in 2015, has lent over $35bn cumulatively, mostly in local currencies. The Contingent Reserve Arrangement (CRA, $100bn) provides emergency liquidity. BRICS Pay is an experimental cross-border payment messaging system. Combined with China’s CIPS, these create an alternative financial architecture that does not need to replace the dollar to be useful for sanctioned or sanction-vulnerable countries. Sanctions architecture coexists with this parallel infrastructure.

The implication: parallel rails reduce the marginal coercion power of dollar exclusion without substituting it.

Channel 3: internal heterogeneity as constraint. The bloc includes monarchies (Saudi Arabia, UAE) and republics, sanctioned (Russia, Iran) and non-sanctioned states, US-aligned (UAE, India to some degree) and US-rivals (China, Russia). India and China have unresolved border disputes. Saudi Arabia and Iran were enemies until China brokered their 2023 detente. This heterogeneity prevents the kind of coordinated action a true bloc would require.

Synthesis by regime. Pre-expansion (before 2024), BRICS was primarily a discussion forum with limited institutional substance — its economic share was already large but coordination was minimal. The 2024 expansion added commodity power (Saudi-UAE-Iran) and population (Egypt, Ethiopia) but did not solve the heterogeneity problem. The 2025 partner-country category extended the bloc further but diluted its coherence. The financial impact is real (NDB, CIPS, gold accumulation, partial yuan trade settlement) but not unified — it manifests as fragmentation of the international monetary system rather than a transition to a new single hegemon.

BRICS will not replace the dollar — but it does not need to. The bloc’s true achievement is making fragmentation politically and operationally viable, even when the alternatives are inferior.

→ Framework: Geopolitics and macro regime transmission

What it means for different economic actors

Savers in advanced economies face limited direct exposure to BRICS dynamics, but the gradual fragmentation of global financial architecture affects long-run currency volatility and reserve composition.

Investors with EM allocations need to understand that BRICS is not an investable bloc — country-specific dynamics (China’s growth slowdown vs India’s rise) dominate over bloc-level themes. Thematic ETFs marketed around “BRICS” or “de-dollarization” rarely deliver the narrative they promise.

Multinational corporations operating in BRICS+ countries face increasing complexity: multiple payment systems, sanctions risk, capital control variations, and the need for hedging across non-dollar currency pairs that have shallower derivatives markets.

A common error is to interpret BRICS expansion as the precursor of a new monetary order. The data shows fragmentation, not transition — useful distinction for portfolio construction.

Practical observation

Go deeper

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Frequently asked questions

Will BRICS launch a common currency?

Most analysts (OMFIF, Atlantic Council, House of Commons) conclude this is unlikely within the next decade. A common currency requires fiscal union, political coordination, and shared monetary policy — none of which exist among BRICS members. The 2024 Kazan summit discussions on BRICS Pay focused on payment messaging, not currency. China would dominate any shared currency arithmetic by GDP weight, which India and other members oppose. The most realistic near-term path is increased local-currency trade settlement, not a unified currency.

How does the New Development Bank compare to the World Bank?

The NDB has cumulatively lent approximately $35bn since 2015. The World Bank’s annual lending alone is around $80bn, with cumulative lending over decades in the trillions. The NDB is small but growing, and importantly lends in local currencies (rupee, yuan, real, ruble) for projects in member countries. It does not aim to replace the World Bank but to complement it for projects where Western institutions decline (often involving Russia or Iran since 2022). Its niche is geopolitically constrained development finance.

Does BRICS expansion threaten the US-led international order?

It complicates rather than threatens. The bloc lacks the institutional coherence of NATO or the EU, and its members maintain bilateral relationships with the US (UAE, India, Egypt are major US partners). What BRICS does is provide an alternative venue for coordination, sanctions evasion, and gold accumulation, reducing the marginal coercion power of US sanctions. The international order is fragmenting toward multipolarity rather than collapsing — a slower and more gradual process than the rhetoric suggests.

Last updated — 29 May 2026