New Delhi: Concerned over uncertain global environment, Brics nations on Thursday signed two agreements to facilitate trade in local currencies and decided to examine the possibility of setting up a Development Bank on the lines of the World Bank to promote funding activities.
The agreements signed at the Brics summit by officials of the five countries--Brazil, Russia, India, China and South Africa -- are aimed at enhancing trade among the members -countries in the coming years.
The Master Agreement on Extending Credit Facility in Local Currency and the Multilateral Letter of Credit Confirmation Facility Agreement are being perceived as a step towards replacing dollar as main unit of trade among them. “The agreements signed today by development banks of Brics countries will boost trade by offering credit in our local currency,” Prime Minister Manmohan Singh said in a media statement after the meeting of Brics leaders.
On the proposal of setting up a Brics Development Bank, he said, “We have directed our Finance Ministers to examine the proposal and report back by next summit.” The initiative to set up a Brics Development Bank on the lines of the World Bank would allow the member-countries to pool resources for infrastructure development and could also be used to lend during the difficult global environment.
Expressing concerns over the current global situation and excessive volatility in capital flows and commodity prices, Brics leaders in the joint declaration said: “The immediate is to restore market confidence and get global growth back on track. ”...it is critical for advanced economies to adopt responsible macro-economic and financial policies, avoid creating excessive global liquidity and undertake structural reforms to lift growth that create jobs,“ it added.