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BRICS countries agree to create self-governing currency reserve of 100 billion dollars

March 27, 2013, 18:22 UTC+3
That will help the BRICS countries prevent a shortage of short-term liquidity
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DURBAN, South Africa, March 27 (Itar-Tass) – The BRICS countries have agreed to establish a self-governing currency reserve of 100 billion dollars to be used in emergency situations, the final declaration of the summit says.

The document notes that the BRICS finance ministers have arrived at the conclusion that the agreement on creating a self-governing currency reserve would have a positive effect as a precaution and help the BRICS countries prevent a shortage of short-term liquidity.

“We believe that creating a currency reserve in an initial amount 100 billion dollars to be used in emergencies is a possible and desirable on the condition there is an internal legal basis and proper guarantees,” the declaration says. “We are instructing our finance ministers and central bank governors to continue the work for the purpose of its creation.”

The BRICS leaders believe that the creation of such a mechanism would help reinforce the global financial safety net and also complement the existing international mechanisms with another safety resource.

Russia’s share in the 100-billion-dollar fund may constitute 18 billion dollars, Finance Minister Anton Siluanov told the media on Tuesday.

“We agreed to proceed with this theme. The shares of participants in the 100 billion are as follows: China – 41 billion, all other countries but for South Africa – 18 billion, and South Africa, 5 billion,” Siluanov said.

“The point at issue was a 100-billion-dollar fund that might be used by the participating countries to furnish support, should any country’s balance gets worse,” Siluanov said. He explained it was not budget money but funds of Central Banks to be reserved by analogy with the Currency Fund.

Each bank should reserve its own part of the gold and foreign exchange assets it would be able to send as a swap to support the balance of payments of this or that country.

The Finance Minister believes the lack of clarity is far greater than that with creating the BRICS development bank. Yet, the countries recognize this guideline as correct.

According to Siluanov, the BRICS countries will look into this matter in greater detail at a meeting of the G20 finance ministers in Washington in April.


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