Brazil, Russia, India, China and South Africa – the BRICS group of fastest growing economies – Thursday signed an agreement to use their own currencies instead of the predominant US dollar in issuing credit or grants to each other.
The agreement, the first-of-its-kind, was signed at the 3rd BRICS summit here attended by Indian Prime Minister Manmohan Singh, China’s Hu Jintao, Brazil’s Dilma Rousseff, Russia’s Dmitry Medvedev and South Africa’s Jacob Zuma.
“Our designated banks have signed a framework agreement on financial cooperation which envisages grant of credit in local currencies and cooperation in capital markets and other financial services,” Manmohan Singh told reporters at a news conference with other BRICS leaders.
But the agreement is confined to credit and not trade. BRICS economies hold 40 percent of the world’s currency reserves, the majority of which is still in US dollars.
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