A US$100 billion fund to combat currency crises has been approved by leaders from Brazil, Russia, India, China and South Africa after the group's plan to establish a development bank failed to materialise.
The bulk of the funding for the foreign-currency pool could come from China, sources say. Bloomberg reports that negotiators are considering proposals for China to contribute $41 billion, Brazil, Russia and India to provide $18 billion each and South Africa $5 billion.
The fund is expected to help BRICS countries forestall short-term liquidity pressures, provide mutual support and further strengthen financial stability.
The BRICS countries, which have 43 percent of the world’s population and total foreign-currency reserves of $4.4 trillion, are seeking greater financial sway to match their rising economic power.
While the group agreed that a development bank was “feasible and viable,” they failed to provide detail on how it would be funded. The BRICS nations have been studying the viability of the bank for a year.