Though the nation is still simmering down after the illustrious World Cup, Brazil was home to another international event recently. On July 15th, representatives of Brazil, Russia, India, China and South Africa convened on the Brazilian city of Fortaleza for the sixth annual summit of the BRICS coalition (an acronym for Brazil, Russia, India, China and South Africa). The BRICS nations announced the formation of two new financial institutions for these nations. Those institutions are the New Development Bank (NDB) and the Contingency Reserve Agreement (CRA).
The NDB was created to finance infrastructure in these nations. Five signatories contributed $10B a piece to act as initial capital. The CRA was created to aid nations financially in times of fiscal difficulty. The CRA will start off with $100B in initial funds.
These entities are in opposition to the World Bank and the International Monetary Fund (IMF), BRICS accuses the cornerstone of international finance of being negligent to their nations and to prevent what Russian president, Vladamir Putin called, “harassment” of countries whose foreign policies clash with America and Europe. Other low to middle income nations will be afforded the opportunity to buy in to the BRICS venture and apply for funding.
This is truly a big happening in the world of international finance. For more detailed information, click here.
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