A common lifeboat to avoid sinking in the currency storm. This seems to be the solution looming on the horizon for the emerging countries – the so-called BRICS – which on the sidelines of the G20 summit would intend to discuss the creation of common currency reserves to protect themselves from the volatility of the exchange market. This was announced by Russian Foreign Minister Sergei Lavrov.
Brazil, Russia, India, China and South Africa will meet on Wednesday, ahead of the G20 summit of heads of state and government, scheduled for Thursday and Friday in St. Petersburg. "We want to examine the state of the art of the goals set in Durban in March, regarding the creation of a BRICS development bank and common currency reserves - explained Lavrov during a press conference - the goal is to fight against the negative influence of market fluctuations on our economies”
Emerging countries – Brazil and India in the lead – have been witnessing the collapse of their currencies since the beginning of the year and capitals are fleeing. At the moment, the counter-move of the central banks of these states consists in the massive purchase of local currency by drawing on foreign currency reserves (above all the dollar and euro).
The BRICS had reached an agreement in Durban, South Africa, on the principle of creating a common development bank intended to finance investments. But they hadn't come to an agreement on how much money each of them should bring into the capital.
