Russian upper house ratifies BRICS $100bn currency pool

Russia’s upper house of Parliament, the Federation Council has ratified an agreement to establish the $100 billion foreign currency reserve pool for the BRICS group. It is intended to protect national currencies from volatility in global markets.

The currency pool will primarily support the balance of payments of the BRICS member states, according to the deputy head of the Federal Council Committee for Budget and Financial Markets Sergey Ivanov.

“Realization of the agreement will also contribute to the effective protection of the national currencies against the volatility in the world currency markets,” Ivanov said.

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“In perspective, the cooperation of the BRICS member states in reforming the international monetary and financial system will remain a priority which is aimed at creating a stable and predictable system of international currencies…,” he added.

China will contribute $41 billion to the pool, Russia, Brazil and India $18 billion each, while South Africa’s investment will be $5 billion.

The fund is expected to be maintained by a managing council, a permanent committee and a coordinator who will be from the country of the current president.

BRICS members signed an agreement in Brazil earlier in July to forge ahead with the $100 billion New Development Bank (NDB), as well as a reserve currency pool worth of $100 billion.