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The BRICS nations on Thursday signed two agreements to provide line of credit to business community and reduce demand for fully-convertible units.
The leaders of the bloc also decided at the fourth BRICS summit in New Delhi to examine the possibility of setting up a development bank to mobilize resources for projects in the bloc and other developing countries.
The Brazilian Development Bank, Russia's State Corporation Bank for Development and Foreign Economic Affairs, India's Exim Bank, China Development Bank Corp. and Development Bank of Southern Africa signed the "Master Agreement In Extending Credit Facility" in local currencies and the "BRICS Multilateral Letter Of Credit Confirmation Facility Agreement," a summit document shows.
The agreements are 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 currency swap deals, coming as weak global demand is hurting export prospects of some BRICS members, highlights the efforts of emerging economies to drag themselves from impact of the euro-zone debt crisis and boost trade thwarted by chilly growth in developed markets.
"The agreements signed today by development banks of BRICS countries will boost trade by offering credit in our local currency," Indian Prime Minister Manmohan Singh said.
The Dehli Declaration issued after the summit also said that the leaders have "considered the possibility of setting up a new Development Bank for mobilizing resources for infrastructure and sustainable development projects in BRICS and other emerging economies and developing countries."
The bank, once set up, will supplement the existing efforts of multilateral and regional financial institutions for global growth and development, said the declaration.
BRICS Finance Ministers are designated to examine the feasibility and viability of such an initiative, and will report back by the next summit, said the declaration.
South African President Jacob Zuma said the prospect of having a BRICS bank will "have great pontential in helping us create jobs in developing countries."
Intra-BRICS trade is about $230 billion and has the potential of more than doubling to $500 billion by 2015.