A new BRICS currency - Rix
1.  The members countries of BRICS are Brazil, Russia, India, China and South Africa. Their currencies start with the letter R - Real, Ruble, Rupee, Remimbi and Rand.

2. BRICS will be introducing a new currency which will be used by their member countries and other countries that seek to join BRICS as full or affiliate members. 

3. I suggest that the name of the BRICS currency be Rix (i.e. start with R). The Rix will be the average of the 5 member currencies, weighted according to the GDP of these countries, weighted by PPP (purchasing power parity). 

4. The GDP of the respective countries in PPP, according to the World Bank are:
 

	GDP PPP - WB
	GDP
China	27.3	58.8%
India	10.2	22.0%
Russia	4.7	10.1%
Brazil	3.4	7.3%
S Africa	0.8	1.7%
Total	46.4	100.0%

5. I suggest that initially the Rix should be set as equivalent to 1 USD. Over time, the exchange between USD and Rix will fluctuate according to the market demand between these two currencies. 

6. The Rix will be backed by Gold to the extent of 1 oz of gold = 10,000 Rix. The current price of gold is $1,900 USD. This means that initially the Rix will be backed by gold to the extent of 19%. While this is not a full backing, it is still better than US dollar (which is not backed by any valuable commodity). When the gold price increases beyond US $10,000, the Rix will fluctuate with the gold price and will be fully backed by gold.

7. The member countries will contribute gold in their respective proportions to back the Rix.  They will receive an initial allocation of Rix for the gold that they have contributed to the Rix central bank.

8. Instead of holding their reserves in USD, countries may wish to hold a significant proportion of their reserves in Rix. They will transfer the USD to exchange for Rix. The Rix central bank can invest the USD in US bonds or use the USD to buy gold.  

9. The central bank of each country will manage the exchange rate between their local currency and Rix. This will be the same way that the managed their exchange rate with the USD. 

10. The advantage of the Rix is that it will not be subject to the interest rate policy of United States (as managed by the US Fed). The interest rate of Rix is likely to be stable. 

Tan Kin Lian 

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