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NEW DELHI -- China Development Bank (CDB) and its BRICS' counterparts will sign agreements on Thursday to formalize cooperation in local currency lending, in a bid to further facilitate trade and investment among the five countries, said chairman of CDB Chen Yuan on Wednesday.
Under the agreements, namely the Master Agreement for Extending Credit facilities in Local Currency, and the Multilateral Letter of Credit Confirmation Facility Agreement, each country will make its own currency loans available to other four member countries.
"Using our own currencies to issue loans and settle payments can minimize exposure to exchange rate fluctuations, reduce our reliance on third-party currencies, and facilitate trade and investment," said Chen in a financial forum gathering of CDB and its Brazilian, Russian, Indian and South African counterparts.
"Since our last gathering in Sanya, member banks have actively implemented the framework agreement on financial cooperation and established a technical working group on local currency lending," Chen added.
Trade among BRICS countries grew in the past decade. Statistics showed that from 2001 to 2010, inter-BRICS trade soared with an average annual growth of 28 percent. Total trade among the five countries stood at $230 billion in 2010.
These two agreements will also be important outcome documents for this year's BRICS summit, bearing far reaching significance in deepening financial cooperation, commented Chen while attending a press conference later in the day.
Chen did not provide the amount of lending, but he believed that "the sum will be considerable".
The pacts to be signed have also been applauded by bank leaders of other BRICS countries. "The two agreements will for sure assist us in promoting our bilateral trade and investment and improve the trade facilities which we are extending to each other," Vladimir dmitriev, chairman of Vnesheconombank, told Xinhua after the forum.
"It is important for BRICS countries to trade in an environment that is not volatile, particularly on currencies," Jabulani Moleketi, chairman of Development Bank of Southern Africa, told Xinhua.
The action will reduce the currency risks and increase the trade and investment volume, Moleketi added.
Representatives from the CDB, BNDES of Brazil, Russia's Vnesheconombank, Export-Import Bank of India and the Development Bank of Southern Africa will sign the pacts on Thursday in the presence of the leaders of five countries.
Leaders from the BRICS bloc gathered in New Delhi for a two-day annual summit under the theme of BRICS countries' commitment to the partnership of stability, security and prosperity. It is the fourth annual meeting of this still relative young mechanism.