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Vol 6 (AAC) No 12

Published 1st October 2013

Future shocks fund

The emerging economies agree to pool their money against financial shocks, but it may not be enough to protect them

Russia’s President Vladimir Putin announced at the Group of 20 Summit in St. Petersburg in early September that the governments of the BRICS grouping – Brazil, Russia, India, China and South Africa – had agreed in principle on the terms of a US$100 billion currency pool to protect against financial shocks. However, it will take a long time for the policy to be implemented. Analysts have also criticised the deal as ineffectual because daily foreign-exchange turnover now averages about US$5 trillion per day. The negotiations also threw up points of disagreement amongst the leaders of the BRICS countries.

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