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BRICS countries agree on the creation of a common fund of reserves to strengthen the group’s financial structure
18 June 2012 - Brazilian minister of Finance Guido Mantega said today, June 18, during an interview on the first day of the G-20 International meetings in Los Cabos, Mexico, that the BRICS countries agreed to begin a process of creating a pool of international reserves and discussed the possibility of signing a swap agreement (exchange of currencies) between group countries.
The minister said the idea is inspired by the Chiang Mai Initiative (financial cooperation agreement in Asian countries) and by swap agreements that the the U.S. Federal Reserve negotiated during the financial crisis of 2008/2009. "The BRICS are strengthening their financial structure. This fund is important for global confidence. By creating financial solidarity among us, we will be even safer and stronger than we already are," said Minister Mantega.
On the increase of resources to the International Monetary Fund (IMF), the minister confirmed that the BRICS must announce the value of their individual contributions, during the Summit in Los Cabos, Mexico. These contributions will be used as a last line of defense and the announcements are tied to an understanding that the reforms of the fund’s quotas, which will result in a greater voting power for emerging countries, will be implemented according to the timetable agreed by the G-20 in 2010.
On the international crisis, Minister Guido Mantega said the BRICS defended the need for policies for stimulus, particularly investments, so that Europe will emerge from the current adverse conditions.