7 Sep 2013

BRICS group to set up $US100b fund

5:46 am on 7 September 2013

The BRICS group of nations - Brazil, Russia, India, China and South Africa - are to set up a $US100 billion fund to guard against financial shocks.

BRICS leaders said on Friday the details of the fund were still being worked out.

"The initiative to establish a BRICS currency reserve pool is at its final stage," President Vladimir Putin of Russia said during the G20 summit in St Petersburg.

"Its capital volume has been agreed at $US100 billion," he added.

Earlier this year, BRICS nations discussed the formation of a new development bank to fund infrastructure and development projects.

The move to establish the fund is seen an attempt to tackle any potential volatile movements in their currencies.

The BBC reports the rupee has weakened 24%, the rand nearly 17%, the real (Brazil) by 15% and the rouble 8% against the US dollar since May. The yuan has strengthened slightly.

China will contribute $US41 billion to the fund. Brazil, India and Russia will put in $US18 billion each and South Africa $US5 billion.