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BRICS economies to boost IMF funds, study currency swaps

To explore currency swaps as part of efforts to promote global financial stability

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Reuters Mexico
Last Updated : Jan 24 2013 | 1:49 AM IST

The five BRICS emerging economies said on Monday they agreed to enhance their contributions to the International Monetary Fund and to explore currency swaps as part of efforts to promote global financial stability.

Leaders of developing world powers Brazil, Russia, India, China and South Africa met on the margins of the G20 summit in Los Cabos, Mexico, and "agreed to enhance their own contributions to the IMF," they said in a statement.

The group did not say how much cash they would offer the IMF, which is seeking a $430 billion infusion of funds, but underscored that the monies would came with conditions on how they were used and were linked to reforms that would five the developing world more say at the Washington-based fund.

"This is with the understanding that these resources will be called upon only after existing resources ... are substantially utilized," said the statement.

"These new contributions are being made in anticipation that all the reforms agreed upon in 2010 will be fully implemented in a timely manner, including a comprehensive reform of voting power and reform of quota shares," it added.

In another sign the big emerging economies were pushing for more influence in the global financial system, and seeking wider use of currencies other than the dollar and euro, the BRICS statement said the five leaders had "discussed swap arrangements among national currencies as well as reserve pooling."

BRICS finance ministers and central bank governors were instructed to study the swaps and pooling arrangements and relevant internal legal issues and report back to the leaders at next year's BRICS summit in South Africa, the statement said.

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First Published: Jun 19 2012 | 1:48 AM IST

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