BRICS Central Bank experts meet in Turkey to finalise joint Monetary Fund
June 14, 2015, 5:55 am

As the BRICS countries prepare to launch new financial institutions like the $100 billion BRICS Bank, the China-led Asia Infrastructure Investment Bank, and a $100 billion BRICS currency reserve fund, the IMF has once again delayed voting reforms to give emerging countries greater say [Xinhua]

Officials from the five BRICS countries are meeting in Bodrum, Turkey on Saturday and Sunday to finalise the joint monetary fund ahead of the 7^th Leaders Summit in Russia. Russia’s Vladimir Putin, China’s Xi Jinping, Jacob Zuma from South Africa, Brazilian President Dilma Rousseff and India’s Narendra Modi will meet for the Summit on 8-9 July in Ufa.

The $100 billion CRA was agreed at a BRICS summit in Fortaleza in July last year. China contributed $41 billion to the capital stock; India, Brazil and Russia each paid in $18 billion, and South Africa’s share is $5 billion.

The reserve fund will provide liquidity support to member countries in response to short-term balance of payments problems.

The CRA is meant to provide an alternative to International Monetary Fund’s emergency lending. In the CRA, emergency loans of up to 30 percent of a member nation’s contribution will be decided by a simple majority. Bigger loans will require the consent of all CRA members.

Meanwhile, the $100 billion development bank, funded by BRICS countries, will offer loans to other middle- and low-income countries.

Membership of the BRICS Bank will be open to all members of the United Nations, subject to agreement from the bank’s board of governors, China’s Vice Finance Minister Shi Yaobin said last week.

“The establishment of the BRICS bank is a landmark event in financial cooperation, which will promote the BRICS countries and other emerging markets, and infrastructure construction and sustainable development in developing countries,” said Yaobin.

“The promotion of reform in global economic governance has important and far-reaching significance,” he added.

As the BRICS countries prepare to launch new financial institutions like the $100 billion BRICS Bank, the China-led Asia Infrastructure Investment Bank, and a $100 billion BRICS currency reserve fund, the IMF has once again delayed voting reforms to give emerging countries greater say.

A statement from the International Monetary Fund on Friday said the board has postponed the discussion on how to move forward without Washington.

The board will now take stock of the situation in September.

“We remain disappointed and seriously concerned with the current non-implementation of the 2010 International Monetary Fund (IMF) reforms, which negatively impacts on the IMF’s legitimacy, credibility and effectiveness,” said BRICS in July’s Fortaleza Declaration in 2014.

TBP