President Hu Jintao , Russian counterpart Dmitry Medvedev and Indian Prime Minister Manmohan Singh are expected to attend the meeting hosted by Brazilian President Luiz Inacio 'Lula' da Silva. Hu will also pay a state visit to Brazil before visiting Venezuela and Chile.

Diplomats said currency co-operation among the four biggest emerging economies would be covered in informal talks and in bilateral encounters on the sidelines of the summit, rather than being put on the official agenda, in order to avoid misunderstandings and controversy.

The official agenda will focus on ways to reshape the global financial system after the worst economic crisis for decades and ideas for a new glocal reserve currency.

The diplomats said if there was consensus on currency co-operation, BRIC ministers would start negotiations on currency swap arrangements to facilitate trade and investment, although it might take months or even longer to reach a final accord.

The Chinese diplomats said the matter would be dealt with 'carefully and in a balanced and prudent manner, without haste', because it involved 'long-term strategy and development direction'.

Analysts said a consensus was very likely because it would serve all four nations' interests and be in line with their development strategies.

'The proposals are feasible and workable at the moment amid the global financial crisis, which suggests the need for closer co-operation among the big four developing economies on currency, trade, investment and mutual financial assistance,' said Zhao Xijun , professor of international finance at Renmin University. 'Any such progress would serve the interests of all.'

China is the world's largest importer of raw materials, including energy and other commodities. Russia boasts rich crude oil and natural gas resources, while Brazil and India are both major suppliers of iron ore to China. Meanwhile, Russia, Brazil and India have strong demand for machinery products from China.

Zhao said progress on currency arrangements among the four nations - which have a combined consumer market of 2.8 billion people, nearly half the global total - would be a significant step in the yuan's internationalisation. He said Hong Kong, designated to become an offshore trading centre for the yuan, would benefit most.

The yuan is not convertible for purely financial purposes, but China has started to carve out a bigger international role for it. Last year, the central government developed a pilot scheme to use the yuan for trade settlement between Hong Kong and a handful of mainland cities. The yuan is also used for trade settlement between China and a few neighbouring countries.

By the end of last year, China had also signed currency swap agreements with South Korea, Indonesia, Malaysia, Argentina and Belarus with a combined value of 650 billion yuan (HK$738 billion). Early last year, the People's Bank of China and the Hong Kong Monetary Authority also signed a 200 billion yuan currency swap.

The People's Bank of China is holding talks with other central banks on additional swap agreements, and is likely to expand them to cover all of the country's trade with Asia. Premier Wen Jiabao says that will help to lay a foundation for the yuan's internationalisation.

For the next step, the central government has been urged to encourage Chinese enterprises to issue yuan-denominated shares or bonds on overseas markets, to establish an offshore yuan market, and to enhance yuan investment functions.

But Tom Orlik, China analyst with Stone & McCarthy Research Associates, said that while the BRIC leaders might agree on the desirability of finding a replacement for the US dollar as the main international currency, it was difficult to see a realistic alternative in the short term.

'Trade between the BRICs is growing fast, but remains limited in size compared with trade with major markets,' he said.

Joining forces

How the BRIC member states measure up

Population

Brazil: 190m Russia: 140m India: 1.2b China: 1.3b

Percentage of global output

Brazil: 2.5 Russia: 2.1 India: 2 China: 8.2

GDP (US$ trillion)

Brazil: 1.5 Russia: 1.3 India: 1.2 China: 4.92

2009 growth rate

Brazil: -0.2 Russia: -7.9 India: 6.1 China: 8.7