The BRICS Emerging Wconomies ‘May Decide On $100B Fund In 2014’

The BRICS Emerging Wconomies ‘May Decide On $100B Fund In 2014’

From iOL

The BRICS emerging economies may decide early next year on their $100 billion fund designated to steady currency markets, Russia’s Finance Minister Anton Siluanov said, indicating little progress at the group’s meeting in Washington.

Officials from Brazil, China, India, Russia and South Africa surprised many by starting work last year on the pool and a joint development bank to reshape the global financial architecture long dominated by rich nations.

But progress has been slow and the bank with a capital of up to $50 billion is still far from running, amid disagreements over burden sharing and where it should be based.

Expectations that the Federal Reserve would ‘taper’ its US bond-buying scheme have reversed the cheap dollar flows that had fuelled a boom among the BRICS, adding urgency to make funds available to members facing balance of payments difficulties.

At the BRICS leaders meeting in St. Petersburg in September, China committed $41 billion towards the pool; Brazil, India and Russia $18 billion each; and South Africa $5 billion .

“At the next BRICS meeting early in 2014, I believe that this matter may be discussed there and a final decision may be made on that,” Siluanov said at a press briefing following the Group of 20 meeting.

The pool, however, will only become operational after ratification by each country’s parliament.

China, holder of the world’s largest foreign exchange reserves and who is to contribute the bulk of the currency pool, wants a greater managing role, said one BRICS official.

“They feel that since they’re giving the most, they should have an advantage,” the official said.

Siluanov, asked at a briefing after the group met on the sidelines of the G20 on Thursday about China’s desires, said that “(at this meeting) this has not been discussed.”

Read more at iOL.