Brics to commit $128b to forex fund, completion a way off
ST PETERSBURG, RUSSIA (REUTERS) - The Brics group of emerging economies will contribute US$100 billion (S$128 billion) to a fighting fund to steady currency markets destabilised by an expected pullback of US monetary stimulus, China and Russia said on Thursday.
China, holder of the world's largest foreign exchange reserves, will contribute the lion's share of the currency pool. But it will be much smaller than the US$240 billion originally envisaged, and officials said it would not be functional for some time yet.
Cheap dollars that fuelled a boom in Brazil, Russia, India, China and South Africa over the past decade have turned tail since Mr Ben Bernanke, chairman of the Federal Reserve, warned in May of a "taper" in the US bond-buying scheme.
"The scale of the reserve arrangement will be US$100 billion and China will take the lion's share of this," China's Vice-Finance Minister Zhu Guangyao told a briefing at the Group of 20 (G-20) summit in St. Petersburg, Russia.