Move over ,BRICS to use own currencies for credit

The issue of conducting mutual trade in local currencies will have to wait for the moment

In a significant first step,the BRICS Brazil,Russia,India,China and South Africa countries will enter into an agreement that will allow their authorised credit agencies to disburse loans in local currencies. However,the issue of conducting mutual trade in local currencies will have to wait for the moment.

These were key elements of a larger Chinese proposal to increase economic interaction among the BRICS members through national currencies than rely on the US dollar. Unwilling to get caught up in having a full-fledged trading arrangement that leaves out the US dollar,countries like India agreed to disbursal of credit in local currencies but have made it known that BRICS was not the forum to have such larger trading arrangements.

Ahead of the meet,Prime Minister Manmohan Singh,who reached here tonight,told Xinhua in an interview that healthy economic relations between India and China would strengthen BRICS.

I am confident that we will surpass our bilateral trade target of 100 billion by 2015,but we have to make more efforts to promote greater Indian exports to China to reduce the trade deficit. The peaceful development of India and China will strengthen BRICS as well as be good for the global economy.

Clearly,many of the BRICS members are not keen on appearing,having taken a stand on the controversial subject of looking beyond the US dollar for trading purposes,particularly in the context of the larger concerns on the Chinese Yuan.

However,the five countries are expected to come up with a common position on Libya.

India,sources said,has supported the African Union initiative on Libya,particularly the aspect of reaching humanitarian assistance at the earliest. South African President Jacob Zuma,who just led the AU delegation to rebel stronghold at Benghazi and then Tripoli to find a way forward,will provide his assessment to the BRICS Summit.

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All five members of the BRICS are members of the UN Security Council and four of them abstained from the vote on the question of use of force in Libya. South Africa voted in favour of the resolution but has since then,reviewed its position and now is trying to lead the African effort to stop hostilities in Libya. A collective political message on from the BRICS Summit on the Libyan crisis is high on the agenda.

This apart,the trade ministers of the five countries will meet separately. Commerce and industry minister Anand Sharma,who is here for this purpose and will later represent India at the Boao forum,said,The BRICS represent the voice of the developing countries and the emerging economies. So when we meet we will discuss various issues,including the state of WTO negotiations.

On being specifically asked about the huge trade imbalance with China,Sharma sought to explain that China is not the only country with which there exists such an imbalance and the government is trying to address it in a comprehensive way. But this is a matter of concern for us and the Prime Minister has taken it up with Chinese leaders. We have been assured better market access through government contracts for our IT and pharmaceutical companies.

Sharma also highlighted the ongoing conversation between the BRICS countries on transforming the global economic governing structures. On the future of BRICS,sources said,this grouping more or less subsumes the RIC Russia-India-China arrangement but does keep IBSA India,Brazil,South Africa still relevant largely due to the stable political nature of the grouping. The BASIC Brazil,South Africa,India and China grouping will remain confined to dealing with issues of climate change given Russias extreme position on the issue. India will also offer to host the next BRICS Summit in 2012.