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South American leaders hail new BRICS bank

Published on Jul 17, 2014 6:51 AM
Chinese President Xi Jinping (third from left) is greeted at the Congress in Brasilia, on July 16, 2014. -- PHOTO: AFP

BRASILIA (AFP) - South American presidents hailed on Wednesday the creation of a development bank by the BRICS group of emerging powers as an alternative to the Western-dominated global financial system.

The leaders of Brazil, Russia, India, China and South Africa held unprecedented talks with South American peers in Brasilia a day after the BRICS agreed to launch the bank and an emergency reserve fund.

The leaders also used the occasion to voice support for Argentina in a US$1.3 billion (S$1.6 billion) debt battle with hedge funds that could sink the country into default by the end of July.

The US$50 billon bank, to be based in Shanghai, will fund infrastructure projects in developing countries while the US$100 billion reserve fund, dubbed a "mini-IMF", will help the BRICS withstand currency crises.

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