Brazil wants G5 to settle trade accounts with own currency

Brazil has asked G5 countries to explore the possibility of using their own currency to settle trading accounts amongst themselves.

The suggestion was made by Brazilian President Luiz Inacio Lula da Silva at a meeting of the G5 countries, comprising Brazil, China, India, Mexico and South Africa, during the G8-G5 summit in this quake-hit city in central Italy.

"Brazil has suggested that G5 countries, amongst themselves, could be using their own currency for settling trade accounts. This does not mean that (the G5) should have a new currency or reserve currency," India's foreign secretary Shivshanker Menon said Thursday.

Menon said that the G5 declaration, made here Wednesday on the first day of the G8-G5 summit being held here, was "new and significant".

"This (the declaration) is clear in the time of the global economic crisis. It includes comments on all major issues like trade, climate change and restructuring of international institutions," Menon told the media here.

In a strong message Wednesday, the emerging economies of the G5 including India asked the grouping of the industrialised nations (G8) to find global solutions to international problems without compromising the interest of developing and poor countries.

The G5 declaration specifically mentioned the financial crisis, protectionist issues in trade, climate change and food security as the issues that the G8 needs to address.

The G5 declaration comes on the eve of the grouping's outreach meeting here with G8, which are the US, Britain, Russia, Germany, France, Canada, Japan and hosts Italy.

"This is a strong statement in the G5 declaration on the restructuring of international institutions. The Prime Minister (Manmohan Singh) and other leaders in G5 agreed that this was required immediately," Menon said.

India and the G5 have said that the world, especially the developed countries, need to take a stand against trade protectionism in the present phase of global economic crisis.

"The Prime Minister (during the G5 meeting) has said that the world was going through a serial crisis of trade, liquidity, food security and energy. These are all interlinked issues. He (PM) added that the last thing that developing countries could afford is a delayed recovery of the (international) economy. He said that the recovery should have an inclusive strategy for growth and include developing countries in doing that," the foreign secretary said.

Last updated on Jul 9^th, 2009 at 17:54 pm IST--IANS