Thaindian News

New Delhi, March 28 (IANS) The group of five emerging countries - Brazil, Russia, India, China and South Africa - which represents almost 43 percent of the world’s population and one-fourth of the global economy, plans to set up a joint development bank and devise a mechanism to trade in their own currencies.

A formal announcement on this is likely to be made at the fourth Brics summit here Thursday, a senior official, who did not want to be quoted, told IANS.

The leaders of the five emerging economies are also likely to work out a mechanism to use their own currencies in trade and other commercial transactions.

Talking to IANS, South Africa’s Minister for Trade and Industry Rob Davies said his country was in favour of setting up a BRICS development bank and allowing currency swap.

“We are very much in favour of the number of proposals which will be tabled at the summit tomorrow,” Davies said, adding that issues like a joint development bank and currency use were likely to top the agenda.

Asked about currency swap, Davies said: “That will happen at the heads of states discussion. We support that.

The official said issue of trade with Iran was also likely to be prominently discussed at the summit. The issue was also discussed at the BRICS trade ministers meeting held Wednesday ahead of the summit.

Chinese Commerce Minister Chen Deming said any disruption of oil supplies from Iran would create a problem for the global economy, especially for countries like India, China and South Africa, who are heavily dependent on the country to meet their energy demands.

Iran is the second biggest supplier of crude oil to India. Almost 12 percent of India’s total oil imports come from Iran.

China and South Africa buy nearly one-fifth of their total crude oil imports from Iran.

“If oil prices continue to rise, it will have an adverse impact on the global economic recovery,” Chen said.

He said China would maintain normal trading relations with Iran despite the pressure from the United States and European countries.

Indian Commerce and Industry Minister Anand Sharma also said that maintaining normal trade relations with Iran did not violate any United Nations resolution.

“Iran has been and continues to be one of the import sources of our energy supplies,” Sharma said.

Another importat issue to be discussed by the BRICS leaders is the setting up of an exchange alliance. It will allow index-based derivatives trading options exchanges in domestic currencies.

(Gyanendra Kumar Keshri can be reached at gyanendra.k@ians.in)