International Sanctions and Economic Restructuring: Modelling the BRICS Monetary Initiative as Counter-Power
Main Article Content
Keywords
economics, international economics, forecast, BRICS, monetary policy
Abstract
This paper explores the BRICS (Brazil, Russia, India, China, South Africa) monetary initiative in the context of international sanctions and economic restructuring. Since 2014, Russia, faced with severe sanctions after the annexation of Crimea, has reoriented its trade relations towards non-Western partners, particularly within the BRICS. This situation has catalysed thinking about the creation of a common currency to reduce dependence on the US dollar and the euro, currencies often used to exert economic pressure. The BRICS currency project aims to strengthen the economic autonomy of member countries and develop an alternative to Western-dominated monetary systems. The study models the impact of sanctions on Russia’s trade flows using the ARIMAX model, incorporating exogenous variables such as economic sanctions. By simulating different scenarios (lifting, maintaining, or intensifying sanctions), the projections highlight the adaptability of Russian trade flows in the face of geopolitical and economic changes.
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References
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Aizenman, J., & Lee, J. (2007). International reserves: Precautionary versus mercantilist views, theory and evidence. Open Economies Review, 18(2), 191-214. https://doi.org/10.1007/s11079-007-9030-z
Bénassy-Quéré, A., & Pisani-Ferry, J. (2011). What international monetary system for a fast-changing world economy?. In The G20 and recovery and beyond (pp. 251-272). International Monetary Fund. https://doi.org/10.5089/9781589069959.071
Bordo, M. D., & James, H. (2010). Reserves and Baskets. Journal of Globalisation and Development, 1(2), 1-24. https://doi.org/10.2202/1948-1837.1041
Cohen, B. J. (2015). Currency power: Understanding monetary rivalry. Princeton University Press. https://doi.org/10.2307/j.ctt1wf4dgb
Desai, R. M. (2003). The political economy of the BRICS. In BRICS and the future of global order (pp. 211-228). Oxford University Press. https://doi.org/10.1093/acprof:oso/9780198723394.003.0011
Eichengreen, B. (2011). Exorbitant Privilege: The Rise and Fall of the Dollar and the Future of the International Monetary System. Oxford University Press.
Frankel, J. A. (2011). Historical precedents for internationalization of the RMB. Council on Foreign Relations. https://doi.org/10.11130/jei.2012.27.3.329
Grekou, C. (2021). The rise of multipolarity: BRICS and global economic governance. Centre d’Études Prospectives et d’Informations Internationales (CEPII). https://doi.org/10.1787/cepii-2021-1-en
Helleiner, E. (2014). The status quo crisis: Global financial governance after the 2008 meltdown. Oxford University Press. https://doi.org/10.1093/acprof:oso/9780199973637.001.0001
Ikenberry, G. J. (2011). Liberal Leviathan: The Origins, Crisis, and Transformation of the American World Order. Princeton University Press. https://doi.org/10.2307/j.ctt7rjt2
Karmin, C. (2020). The geopolitical impact of a BRICS currency on global trade. Journal of Economic Perspectives, 34(4), 78-105. https://doi.org/10.1257/jep.34.4.78
Ocampo, J. A. (2017). Resetting the International Monetary (Non) System. Oxford University Press. https://doi.org/10.1093/oso/9780198718116.001.0001
Obstfeld, M., & Rogoff, K. (2009). Global imbalances and the financial crisis: Products of common causes. In Asia Economic Policy Conference, Asia and the Global Financial Crisis, Federal Reserve Bank of San Francisco, 131-172.
Subramanian, A., & Kessler, M. (2013). The renminbi bloc is here: Asia down, rest of the world to go? Peterson Institute for International Economics Working Paper, (13-19). https://doi.org/10.2139/ssrn.2298011
Wu, F., & Gopinath, G. (2018). The rise of the RMB as a global currency: Why, how and when?. Harvard Business Review. https://doi.org/10.2139/ssrn.3243089
Zhou, X. (2009). Reform the international monetary system. People’s Bank of China. https://doi.org/10.5089/9781455257983.071
Arslanalp, S., Eichengreen, B., & Simpson-Bell, C. (2022). The Stealth Erosion of Dollar Dominance: Active Diversifiers and the Rise of Nontraditional Reserve Currencies. International Monetary Fund. https://doi.org/10.5089/9798400204746.001
Bergsten, C. F. (2022). The dollar and its discontents. Foreign Affairs, 101(4), 105-117. https://www.foreignaffairs.com/
Campanella, M. L. (2014). The internationalization of the renminbi and the rise of a multipolar currency regime. Journal of Asian Economics, 34, 58-78. https://doi.org/10.1016/j.asieco.2014.06.005
Chen, M. X., & Garcia-Herrero, A. (2021). The rise of China and the future of the international monetary system. China Economic Review, 67, 101591. https://doi.org/10.1016/j.chieco.2021.101591
Ghosh, A. R., Ostry, J. D., & Tsangarides, C. G. (2010). Exchange rate regimes and the stability of the international monetary system. International Monetary Fund. https://doi.org/10.5089/9781589069312.084
Kawai, M., & Pontines, V. (2014). Is there really a renminbi bloc in Asia? A modified Frankel-Wei approach. Journal of International Money and Finance, 42, 1-10. https://doi.org/10.1016/j.jimonfin.2013.10.007
Mundell, R. A. (2002). The euro as a stabilizer in the international monetary system. In European Central Bank Forum (Vol. 2002). https://doi.org/10.1007/978-1-4615-1169-0_10
Subacchi, P. (2016). The People’s Money: How China Is Building a Global Currency. Columbia University Press. https://doi.org/10.7312/suba17346
Williams, D. (2020). A multipolar world currency? The yuan’s role in the global financial system. Journal of Global Financial Markets, 9(3), 173-189. https://doi.org/10.1002/jgfm.1099
Yu, Y. (2014). How far can renminbi internationalization go? Journal of Asian Economics, 33, 2-19. https://doi.org/10.1016/j.asieco.2014.04.004
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Jan 23, 2026
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International Sanctions and Economic Restructuring: Modelling the BRICS Monetary Initiative as Counter-Power. (2026). Journal of BRICS Studies, 4(2), 19-45. https://doi.org/10.36615/9fa49q05
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International Sanctions and Economic Restructuring: Modelling the BRICS Monetary Initiative as Counter-Power. (2026). Journal of BRICS Studies, 4(2), 19-45. https://doi.org/10.36615/9fa49q05
