BRICS to sign currency agreement

China.org.cn, March 29, 2012

China Development Bank and its BRICS' counterparts will sign agreements?to formalize cooperation in local currency lending, Chen Yuan, the bank's chairman, said in New Delhi Wednesday, without giving details on the amount of the lending.

But Chen believed "the sum will be considerable."

Under the agreements, namely the Master Agreement for Extending Credit facilities in Local Currency, and the Multilateral Letter of Credit Confirmation Facility Agreement,?each country will make its own currency loans available to the other four member countries.

"Using our own currencies to issue loans and settle payments can minimize exposure to exchange rate fluctuations, reduce our reliance on third-party currencies, and facilitate trade and investment," Chen said at a meeting with the bank's Brazilian, Russian, Indian and South African counterparts.

Trade among BRICS countries grew in the past decade with an average annual growth of 28 percent to reach?US$230 billion in 2010.

The agreements will also be among important outcome documents from the ongoing BRICS summit, which will be of far-reaching significance in deepening financial cooperation, Chen said at a press conference later in the day.

The pacts to be signed were applauded by bank leaders of other BRICS countries.

"The two agreements will for sure assist us in promoting our bilateral trade and investment and improve the trade facilities which we are extending to each other," Vladimir Dmitriev, chairman of Vnesheconombank, said.

"It is important for BRICS countries to trade in an environment that is not volatile, particularly on currencies," said Jabulani Moleketi, chairman of Development Bank of Southern Africa.

Leaders from the BRICS bloc are in New Delhi for a two-day summit which opens today under the theme of their commitment to a partnership of stability, security and prosperity. It is the fourth annual meeting of the still relatively young mechanism.

(Xinhua contributed to the story)