The BRICS Group would be contributing USD100 billion to a fighting fund. According to Russian President Vladimir Putin on Thursday, the move was done to steady currency markets after the announced pullback of the US monetary stimulus. The BRICS group is composed of member countries Brazil, Russia, India, China and South Africa.
Over the past decades, cheap dollars fueled a boom in the emerging markets of Brazil, Russia, India, China and South Africa. However, this had turned tail since after Federal Reserve Chairman warned of the stimulus reduction of the US.
Putin said during his opening remarks in a BRICS meeting, "The initiative to establish a BRICS currency reserve pool is at its final stage. Its capital volume has been agreed at $100 billion."
During the meeting of the BRICS leaders, China was announced to commit USD41 billion. Meanwhile, Brazil, India and Russia committed USD18 billion each. Furthermore, South Africa committed USD3 billion.
China is the current holder of the world's biggest foreign exchange reserves. China would also contribute to the bulk of the currency pool. However, the contribution to the fund would be smaller than the USD240 billion it had originally pledged. Chinese officials said that the fund would not be functional yet.
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