BRICS to promote local currencies

The group of five emerging economies, Brazil, Russia, India, China and South Africa (BRICS), joined hands on Thursday in calling for a “more representative” international financial architecture with an “increase” in the voice and representation of developing countries.

The heads of states of the five countries - Dilma Rousseff (Brazil), Dmitry Medvedev (Russia), Manmohan Singh (India), Hu Jintao (China) and Jacob Zuma (South Africa) - met at the fourth BRICS summit held at the Taj Palace here.

Even as they expressed concern over the global economic situation and asked “advanced economies” to adopt “responsible macroeconomic and financial policies”, they signed two agreements (Master Agreement on Extending Credit Facility in Local Currency, and BRICS Multilateral Letter of Credit Confirmation Facility Agreement) aimed at insulating themselves from the Euro-debt crisis, and providing a thrust to intra-BRICS trade.

“We agree to build upon our synergies and to work together to intensify trade and investment flows among our countries to advance our respective industrial development and employment objectives,” a joint statement said.

The Master Agreement on Extending Credit Facility in Local Currency is intended to “reduce the demand for fully convertible currencies for transactions among BRICS nations,” and thereby help “reduce the transaction costs of intra-BRICS trade”.
The five countries are also examining a proposal to set up a “BRICS Development Bank.”