BRICS nations want to ditch the dollar; BJP releases the "Congress Files" video series; and the Cyrus Poonawalla v Modi govt saga

Market Watch

• Indian benchmark indices ended the day in the green, with the Sensex up 114 points at 59,106, and Nifty up 38 points at 17,398.
• Sectorally, Nifty Oil & Gas (-0.44%) and Metal (-0.36%) shed the most, while Auto (1.49%) and PSU Bank (1.06%) gained the most.

BRICS alliance is working to create its own currency to end dollar supremacy

Leaders of the BRICS alliance—Brazil, Russia, India, China, and South Africa—are reportedly working on a new currency system with the apparent aim to ditch the dollar in their international trade.

• The reports come after Moscow adopted a new foreign policy citing India and China as its primary partners on the global stage.

The details: Russian lawmaker Alexander Babakov reportedly said that the new currency would be based on a strategy that “does not defend the dollar or euro” and would be secured by gold and other commodities such as rare-earth elements. Other member states of the BRICS alliance are yet to confirm the announcement.

• The first step toward this system would be for BRICS nations to settle trade in national currencies among themselves. This is already in place between Russia-China, Russia-India, and China-Brazil.

Why this matters: The “weaponisation” of the dollar by the US - seizing Russia's reserve dollar assets - reminded the world of the fragility of a system that is run on a singular powerful currency; hence, the move toward diversification.

• BRICS countries account for over 40% of the global population and around 25% of the global GDP.
• Recently, even the 10-nation ASEAN (Association for South East Asian Nations) grouping discussed dropping the US dollar, euro, and British pound for trade settlements, instead opting for settlements in local currencies.
• Several countries including Saudi Arabia, Iran, Argentina, UAE, Egypt, and Mexico have also expressed interest in joining the BRICS alliance.

How can this work: Replacing the dollar altogether in global trade would be difficult, but using a USD+X (X being another currency) system could pave the way for a more equitable trading mechanism.

• The Chinese yuan could be an obvious candidate since China is the world's second-largest economy, but this would only increase other countries' dependence on Beijing.
• India, for example, refused to settle trades with Russia using the Yuan and instead chose the Dhiram. Hence, the most likely way for true “de-dollarization” would be to diversify reserve assets into at least 5 or 6 major global currencies.
• Another possible option would be to have a custom currency indexed to the average of multiple currencies - for example, a BRICS CBDC - weighted against the reserves and assets of Brazil, Russia, India, China and South Africa.

The bottom line: However it is taken forward, BRICS remains the most relevant group to initiate a de-dollarization move because - it is a purely economic grouping; it represents the biggest economies of the Global South; and it consists of some of the biggest producer and consumer nations in the world - making a sustainable trade bloc viable.

BJP releases three-part video series called the 'Congress Files'

Yesterday, the BJP released the first episode of a series of videos called the "Congress Files", in which they alleged that the party has been involved in scams worth Rs 48,20,69,00,00,000.

• Today they released episode 2 - describing how the Gandhis allegedly forced Yes Bank’s former managing director Rana Kapoor to buy an expensive painting, the proceeds of which reportedly went toward Sonia Gandhi’s health treatments.
• Some of the key allegations they make include: “Congress has looted Rs 48,20,69,00,00,000 from the public in 70 years of its rule...Using this much amount, 24 INS Vikrant, 300 Rafale jets, and 1000 Mangal Missions could have been made or purchased.”
• They also called the Congress tenure from 2004-14 a “Lost Decade” for the country highlighting the “Coal scam of Rs 1.86 lakh crore, 2G Spectrum scam of Rs 1.76 lakh crore, MNREGA scam of Rs 10 lakh crore, Commonwealth scam of Rs 70,000 crore, and a bribe of Rs 362 crores in the helicopter deal with Italy.”

Between the lines: The release of the videos is part of a publicity campaign in the run-up to the 2024 general elections.

• Not one to back down, the Congress has also been releasing its own set of videos titled “Democracy Disqualified”, posting interviews with scholars and politicians bashing the BJP’s ideology and policies.

Cyrus Poonawalla vs Modi govt: Why the billionaire has been blocked from his $120M Mumbai mansion

Indian billionaire Cyrus Poonawalla is yet to move into his $120 million mansion in Mumbai after eight years due to an ownership dispute between the Maharashtra government and the defence ministry over the land where the property is located.

The details: The house in question - Lincoln House - spread over 2 acres in Mumbai’s Breach Candy was built by Maharana Amarsinh Jhala, the last ruler of Wankaner.

• In 1957, he transferred the lease rights to the American government for Rs 18 lakh, on the terms of a ‘lease of perpetuity for 999 years’.
• In 2011, the US consulate put the Lincoln House up for auction as the consulate was moving to a bigger space in the Bandra-Kurla complex.
• In 2015, the Poonawallas paid up a “substantial portion” of the auction amount to the US, and intended to use the house as their weekend getaway.

So what’s the problem? However, the land on which the property sits is under the Defense Ministry's defence estates department, which has objected to the deal on technical grounds, stating that the Americans failed to provide notice of the sale within a mandated 20-day period.

• The Maharashtra government also claims the land. Given the dispute between the centre (defence ministry) and a state (Maharashtra), the government has put the deal on hold.
• Since the auction involves a foreign government, the final decision about the property will have to be taken by the Prime Minister’s Office according to protocol.

ICYMI

• Unacademy and Byju’s are in a tussle for Aakash because the ed-tech giants both see Aakaash as a golden goose.
• Congress leader Rahul Gandhi has managed to secure an extension on his bail till April 13 in the “Modi surname” defamation case.
• French minister Marlène Schiappa’s planned appearance on the cover of Playboy magazine has sparked a political controversy in the country.
• The National Council of Educational Research and Training (NCERT) has removed the chapters related to Mughal Empire while updating the Class 12th curriculum for the academic year 2023-24.
• PM Narendra Modi has retained his position has the world’s ‘most popular’ leader, outclassing the likes of US President Joe Biden, and his UK counterpart Rishi Sunak.
• As ChatGPT sparks an AI gold rush in Silicon Valley, several companies are offering employees an annual salary of over Rs 2.50 crore to improve their AI chatbots.
• Fast food giant McDonald’s has shut its US offices for this week as it prepares to lay off an undisclosed number of corporate employees.