Economic and Financial Integration in BRICS+

The BRICS+ initiative has gained momentum with growing efforts toward economic and financial integration. This study assesses the feasibility of economic and financial integration in BRICS+ countries using the Mundell-Fleming Trilemma framework, focusing on the trade-offs between monetary policy independence, exchange rate stability, and capital mobility. We find inflation convergence among BRICS+ countries, indicating potential for future monetary coordination. However, foreign reserves—including China’s substantial holdings—fail to stabilize inflation or reduce exchange rate volatility, challenging conventional knowledge. Instead, capital flows and trade integration show greater stabilizing effects. These findings suggest a strategic shift from reserve accumulation to coordinated capital flow management and institutional development. While structural divergences persist, gradual policy convergence—supported by instruments like the New Development Bank—could enable long-term integration. Recent research confirms several results but highlights ongoing macroeconomic divergence, mixed exchange rate behavior, and the limited impact of passive reserve accumulation.