FORTALEZA: Leaders of the BRICS emerging market nations launched a $100-billion development bank and a currency reserve pool on Tuesday in their first concrete step toward reshaping the Western-dominated international financial organization.
The bank focused at funding infrastructure projects in developing nations will be based in Shanghai and India will preside over its operations for the foremost five years, followed by Brazil and then Russia, leaders of the five-nation group announced at a peak.
They also put up a $100 billion currency reserve pool to help countries forestall short-term liquidity pressures.
The BRICS was prompted to seek coordinated action following an exodus of capital from emerging markets last year, sparked off by the scaling back of the U.S. monetary stimulus.
The contingency currency pool will be accommodated in the reserves of each BRICS country and can be repositioned to another member to cushion balance of payments difficulties.
The world’s largest foreign exchange holder reserves – China, will give the bulk of the contingency currency pool, or $41 billion. Brazil, India and Russia will chip in $18 billion each and South Africa $5 billion.
Negotiations over the home base and first presidency were made at the eleventh hour due to differences between India and China. Stark economic and political conflicts among the BRICS countries have made it hard for the group to turn oratory into concrete action in coordinating policies.