Russian President Vladimir Putin on Monday ratified BRICS (Brazil, Russia, India, China and South Africa) currency pool deal which enables to constitute a 100 billion dollars fund among the bloc of large emerging economies.
Russia’s Ministry of Justice Portal announced on Monday ratification of the bill by the Kremlin presidential office.
Last week, Russian parliament’s upper house, the Federation Council had ratified the treaty on the establishment of a pool of foreign exchange reserves of the BRICS and sent it to the President Putin for his approval.
One of the main purposes of the reserve pool is to protect national currencies of the BRICS countries from volatility of the global markets, according to Sergey Ivanov, the deputy head of the Federal Council Committee for Budget and Financial Markets of the Russian Federation.
“Realisation of the agreement will also contribute to the effective protection of the national currencies against the volatility in the world currency markets,” Ivanov told Russia’s English broadcaster Russia Today (RT).
The acronym for an association of five major emerging national markets, the term BRICS corresponds to almost 42 percent of the world’s population in more than a quarter of the world’s area surface together with 20 percent of the world’s total GDP.
China is expected to contribute the biggest financial aid with 41 billion dollars into the BRICS reserve pool while Brazil, Russia and India have committed each to put 18 billion dollars. South Africa also pledged to donate five billion to the monetary pool.
The respective countries had agreed to establish 100 billion dollars worth reserve pool in July of the last year as they also committed to vitalise a BRICS Development Bank with another hundred billion dollars collected money.
The BRICS countries aim to decrease their economic dependency on Western international creditors like IMF and World Bank through the establishment of those cooperation which also enable them to give loan money to less developed countries.
Russia had taken the BRICS’ rotating presidency in April and pledged to materialise reserve pool and Development Bank.