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BRICS readies response to stronger dollar
June 25, 2013, 7:51 am

[PPIO]

A $100 billion contingency reserve arrangement was announced during the BRICS Summit in March [PPIO]

Brazilian President Dilma Rousseff has announced plans to coordinate a BRICS response to a stronger dollar impact on emerging economies.

“The BRICS will decide on coordinated action related to the global appreciation of the US dollar at a meeting in July in Russia,” Thomas Traumann, spokesman for the Brazilian government said.

In a phone conversation with Chinese President Xi Jinping late Monday night, President Rousseff discussed ways to strengthen policy coordination even as the US Federal Reserve signalled plans to scale back its massive stimulus programme.

Rousseff will be discussing measures with all the leaders of the BRICS bloc, which include Russia, India and South Africa, later this week.

The Chinese president during his conversation with Rousseff asserted that BRICS need to speed up the construction of the $100 billion contingency reserve arrangement announced during the Durban BRICS Summit in March.

Noting that some “new and complex elements” have occurred in the international financial markets, Xi said the BRICS nations should pay close attention to the relevant dynamics, boost communication and cooperation in the financial field.

Xi also proposed that the BRICS nations push the international community on enacting relevant commitments reached at G20 summits and fight protectionism.

The Indian rupee last week plunged by a whopping 130 paise to hit a life-time low of 60 against the US dollar in early trade on the Interbank Foreign Exchange on strong demand for the American currency from banks and importers.

The dollar’s strength against major currencies overseas on comments by Federal Reserve chairman Ben Bernanke that the central bank may scale back its monetary stimulus programme later this year weighed on the domestic unit, dealers said.

In slightly over a decade, the BRICS’ combined GDP has grown from approximately $3 billion to more than $13 billion.

Source: Agencies