Leaders from Brazil, Russia, India, China and South Africa have agreed to create a US$100 billion pool of currency reserves to guard against financial shocks, Chinese Deputy Finance Minister Zhu Guangyao said yesterday.
"The scale of the reserve arrangement will be US$100 billion and China will contribute the lion's share of this," Zhu said at the Group of 20 summit in St Petersburg, Russia.
China will contribute US$41 billion, while Russia, India and Brazil will each add US$18 billion to the pool. South Africa will provide US$5 billion.
Leaders from the five emerging market economies known as the BRICS were also discussing the creation of a joint development bank that would invest in infrastructure, Zhu said.
Political leaders may give further guidance on the bank's mandate at an informal meeting this week, he said.
South Africa's rand has depreciated 17.7 per cent against the dollar this year, the most among 24 emerging-market currencies tracked by Bloomberg. However, the Chinese currency has strengthened 1.8 per cent.
"We see the temporary difficulties of some BRICS countries mainly as difficulties in terms of international balance of payments," Zhu said. "The policy options in response to such typical balance-of-payments difficulties include increasing interest rates or devaluing currencies."