BRICS countries agree on $100bn foreign currency reserve pool

Brazil, Russia, India, China and South Africa have agreed on a joint foreign currency reserve pool of 100 billion U.S. dollars, China's deputy finance minister said on the sidelines of the G20 summit Thursday. The agreement has yet to be ratified by the leaders of the countries, known collectively as BRICS. Zhu Guangyao told a G20 press briefing the consensus had come as a follow-up to the BRICS' accord to set up a joint development bank, which was reached at this year's BRICS summit in Durban, South Africa. "BRICS finance ministers have conducted multiple consultations since Durban," the Chinese official said. "All BRICS countries are of the opinion that a BRICS development bank is a decision of strategic significance and the decision should also bear importance to remedying the global financial system." "The BRICS countries are also discussing how to link up their reserve pool with that of the International Monetary Fund and in what ratio," Zhu said. The deputy minister admitted there had been currency depreciation and capital flight in BRICS countries, which, though caused mainly by external factors, demonstrated the internal structural defects of these countries, which had accordingly shown some difficulties in current account balances. "The BRICS countries do believe, however, that through coping with their current account issues through macro-economic policies formulated in accordance with market economy principles, self-inspired incentives for growth within BRICS countries will augur well for their healthy and sustainable development," Zhu said. "We're confident that, within the global macro-economic framework, the BRICS countries will bring their respective and collective internal economic and financial mechanisms into joint supportive play (for global growth)," he said. According to the Chinese official, the BRICS leaders will also meet unofficially in St. Petersburg to compare notes on macro-financial policy issues.