Leaders of the BRICS emerging market nations launched a $100 billion (€73.5 billion) development bank and a currency reserve pool yesterday (15 July) in their first concrete step toward reshaping the Western-dominated international financial system.
BRICS launch ‘New Development Bank’ | EurActiv
BACKGROUND
The grouping of the emerging economies – Brazil, Russia, India, China and South Africa (BRICS) have indicated they to create their own version of the World Bank.
The five countries hold foreign-currency reserves of $4.4 trillion (€3.4 trillion), and need an institution to safeguard this amassing wealth. The reserve will also protect members from short-term liquidity volatility and balance-of-payment problems.
One long-running speculation was that the BRICS nations would ultimately want to form their own currency as an alternative to the U.S. dollar and the euro. This could reduce demand for the dollar as a reserve currency, which could lower the dollar's value relative to other currencies.
BRICS launch ‘New Development Bank’ | EurActiv
BACKGROUND
The grouping of the emerging economies – Brazil, Russia, India, China and South Africa (BRICS) have indicated they to create their own version of the World Bank.
The five countries hold foreign-currency reserves of $4.4 trillion (€3.4 trillion), and need an institution to safeguard this amassing wealth. The reserve will also protect members from short-term liquidity volatility and balance-of-payment problems.
One long-running speculation was that the BRICS nations would ultimately want to form their own currency as an alternative to the U.S. dollar and the euro. This could reduce demand for the dollar as a reserve currency, which could lower the dollar's value relative to other currencies.
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