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    Default BRICS agree on $100 bn fund, India to give $18 bn

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    (Left to right) Brazil's President Dilma Rousseff, India's Prime Minister Manmohan Singh, Russia's President Vladimir Putin, China's President Xi Jinping and South African President Jacob Zuma after a BRICS leaders' meeting at the G20 Summit on September


    Battling stunted growth and devaluing currency values, the five nation BRICS grouping, including India, on Thursday decided to launch a $100 billion currency reserve fund which is expected to help them navigate through an imminent phase out of the US stimulus package.

    India will contribute $18 billion to the Contingent Reserve Arrangement (CRA), that will have an initial size of $100 billion. China will contribute the largest chunk of the fund making a commitment of $41 billion. Brazil and Russia will also contribute $18 billion each while South Africa will give $5 billion.

    Consensus was achieved on many key aspects and operational details regarding the establishment of the CRA, a media note on the informal meeting of BRICS Leaders ahead of the G20 Summit said.

    BRICS comprises of Brazil, Russia, India, China and South Africa.

    The BRICS leaders, Prime Minister Manmohan Singh, Chinese President Xi Jinping, Russian President Vladmir Putin, South African President Jacob Zuma and Brazilian President Dilma Rousseff, noted the continued slow pace of the recovery, high unemployment in some countries, and on-going challenges and vulnerabilities in the global economy, particularly in advanced economies.

    They said that major economies, including G20, could do more to boost global demand and market confidence.

    "In light of the increase in financial market and capital flow volatility during recent months, the BRICS Leaders reiterated their concerns they had expressed in the Durban Summit in March, regarding the unintended negative spillovers of unconventional monetary policies of certain developed economies," the note said.

    "They emphasised that the eventual normalisation of monetary policies needs to be effectively and carefully calibrated and clearly communicated," it said.

    BRICS leaders also expressed their concern with the stalling of the International Monetary Fund reform process. They recalled the urgent need to implement the 2010 IMF Quota and Governance Reform, as well as to complete the next general quota review by January 2014 as agreed at the G20 Seoul Summit in order to ensure the Fund's credibility, legitimacy and effectiveness.

 

 

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