BRICS members to trade in local currencies

NEW DELHI: Taking note of uncertainty in global political and economic situation, India, China, Russia, Brazil and South Africa today took the first step towards mutual trade in local currency and voiced strong opposition to any military action or rhetoric with regard to Syria and Iran.

At their Summit meeting here, Prime Minister Manmohan Singh, Chinese President Hu Jintao, Russian President Dmitry Medvedev, Brazilian President Dilma Rousseff and South African President Jacob Zuma pitched for close coordination among the five leading economies to meet the challenges being witnessed in the global scenario.

After the Brazil-Russia-India-China-South Africa (BRICS) Summit, an agreement was signed under which credits would be extended in local currencies under the BRICS Interbank Cooperation Mechanism. Another pact signed was the Multilateral Letter of Credit Confirmation Facility Agreement between BRICS countries' Exim/Development Banks.

The agreements mark the initial steps for intra-BRICS trade in local currency.

Singh said the agreements would boost trade among the BRICS countries. At the same time, he pressed for easing of business visas to facilitate increase in intra-grouping trade and investment.

A suggestion was made to set up a BRICS Development Bank, the Prime Minister said, adding the leaders directed finance ministers to examine the proposal and report back at the next Summit.

Summing up the sense of the meeting, Singh said all the five countries were affected by the global economic slowdown, volatility in food and energy prices, political uncertainty in West Asia and the rise of terrorism and extremism.