Never a coherent political group, Brics (an acronym for Brazil, Russia, India and China) may now see more turbulence, courtesy Chinese insecurities over an overvalued yuan.
A Reuters report on Friday citing Chinese analysts said Beijing is feeling pressure from Brazil and India, mainly the former, with whom it wants to build a sound economic partnership. It is blaming the US for egging on the two countries to raise the yuan valuation issue.
Reserve Bank of India governor D. Subbarao had raised the issue, but there have been no protests from the government on the subject. India should be wary of becoming a pawn in what is a US-China fight, albeit one that affects the rest of the world. The US is not free from blame: the second round of quantitative easing has created its own set of problems, and India and Brazil are not immune from this.