FX.co ★ BRICS approve a new fund to combat currency crises

Vladimir Putin voiced the sum which will be transferred to the BRICS nations’ reserve fund. Russia is set to provide the StabFund with $18 billion. The decision came at the G20 summit gathering the five BRICS leaders from Brazil, Russia, India, China, and South Africa. At a special meeting, the monetary authorities discussed the establishment of a $100 billion currency reserve pool.
The officials considered a share of each country. “Russia is ready to contribute $18 billion. "The fund’s capital volume has been agreed at $100 billion", the Russian President said.
The BRICS countries represent the largest segment of the global market. It is 40% of the Earth population, 17% of the world’s trade operations and more than 27% of the global GDP, which is $15.4 trillion.
The latest move to establish the fund is seen an attempt by BRICS nations to tackle any potential volatile movements in their currencies.
“The currency pool is created by means of international reserves managed by national banks or central banks. The goal is to reach an agreement among the central banks regarding common legal environment, which will allow, if necessary, to conduct swap operations in a timely manner”, Russian Deputy Finance Minister Sergei Storchak clarified.
A joint BRICS development bank, with capital of up to $50 billion, has also been worked out. It will be funded at the expense of taxpayers.