The BRICS Nations have signed an agreement to create a USD 100 billion forex pool to help each other “in case of any problems with dollar liquidity”.  The contributions are,

• India – USD 18 billion
• Brazil – USD 18 billion
• Russia – USD 18 billion
• China – USD 41 billion
• South Africa – USD 5 billion

The central banks of Brazil, Russia, India, China and South Africa have signed Operational Agreement on July 7, 2015 in Moscow. The Agreement outlines the terms of mutual support for member states in the framework of the Agreement on BRICS Pool of Conventional Currency Reserves.

Points to Note

• The fund will be an “insurance instrument” that members nations could draw on if they experience problems with their balance of payments.
• The Pool will go into force on July 30′ 2015.
• No new members are planned to be included in it.
• The Pool would help BRICS members to maintain financial stability in case of volatility in dollar exchange rate.
• The BRICS nations account for nearly USD 16 trillion in GDP and 40 per cent of the world’s population.