BRICS establish $100bn reserve currency pool

Finance Ministers and Chiefs heads of the Central Banks of BRICS countries have signed an operating agreement on the currency reserve pool

BRICS establish $100bn reserve currency pool

World Bulletin / News Desk

Central banks of BRICS countries have signed an operating agreement on the currency reserve pool. The $100 billion pool is meant to protect BRICS member-states from possible currency volatility shocks.

The agreement was signed by the Finance Ministers and Chiefs heads of the Central Banks of BRICS countries - Brazil, Russia, India, China and South Africa. The agreement contains explanation and description of how the pool is going to process as well as definition of rights and duties. The currency pool deal will come into force on 30 July.

$100 billion for the pool are no going to contributed evenly; China will have the biggest share - $41 billion, India, Brazil and Russia will donate $18 billion each, while South Africa’s investment will be $5 billion. So far the money remain on the banks’ balance sheets and will be unlocked as soon as any of the BRICS member states ask for help.

The goal of the pool is to give BRICS member states opportunity to provide each other financial assistance in case of problems with their balance of payments.

BRICS represents 42 percent of the world’s population and roughly 20 percent of the world’s economy based on GDP, and 30 percent of the world’s GDP based on PPP, a more accurate reading of the real economy. Total trade between the countries is $6.14 trillion, or nearly 17 percent of the world’s total.

 

 

Güncelleme Tarihi: 08 Temmuz 2015, 13:36
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