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BEIJING -- The BRICS nations are close to consensus on the establishment of a Contingent Reserve Arrangement (CRA) within the bloc, a senior Chinese central bank official said on Tuesday.
"We will see the CRA put into place in the near future," Yi Gang, deputy governor of the People's Bank of China, told a press briefing.
The leaders agreed to set up a Contingent Reserve Arrangement (CRA) with an initial size of $100 billion at the fifth BRICS summit in March in the South African city of Durban.
The CRA will help BRICS countries forestall short-term liquidity pressures, provide mutual support and strengthen financial stability.
"The working group of the CRA is actively pushing the process forward," said Yi, noting that the BRICS countries have so far reached consensus on the ratio of contributions, operation mechanisms, governance structure and loan-to-value ratio (LVR).
As market volatility and uncertainty swell, the CRA will be conducive to enhancing confidence among BRICS countries, said Yi, adding that a solid foundation has been laid for the arrangement.
Yi said more agreements on the CRA will be made when BRICS leaders meet informally on the sidelines of the G20 summit, which is scheduled for Sept 5 to 6 in St Petersburg.
At the press briefing, Chinese Vice Foreign Minister Li Baodong attributed the market volatility to some developed countries' abrupt change of tone in monetary policy.
The past weeks have seen renewed volatility in global markets after US Federal Reserve ChairmanBen Bernankeindicated in June that the Fed might start to scale back monetary easing later this year if the world's largest economy improves as forecasted.
Signs of an imminent exit from the unconventional monetary easing policy have affected market expectations of some emerging economies, which have seen dramatic outflow of foreign investments, said Li.
However, the domestic financial markets of emerging economies are strong enough to withstand risk, and the international community has been improving the global financial safety network for years, said Li, naming the 10+3 regional foreign-exchange reserves pool and the CRA as examples.
The 10+3 foreign-exchange reserves pool was established by the Association of Southeast Asian Nations (ASEAN), plus China,Japanand the Republic of Korea, with a size of $240 billion.
"We hope that developed economies will adopt responsible economic policy and enhance communication with other G20 members so as to achieve an early recovery of the world economy," said Li.