Thaindian News

On board Air India One, April 12 (IANS) In a first of its kind, BRICS nations - Brazil, Russia, India, China and South Africa - will sign a major pact Thursday that will enable them to give credit or grants to one another in their local currencies instead of US dollars.

The accord will be signed at the 3rd BRICS summit to be attended by Prime Minister Manmohan Singh and heads of state of the other four countries in Chinese coastal city of Sanya, India’s National Security Advisor Shiv Shankar Menon told reporters while flying from New Delhi to Sanya, a Chinese coastal town where the summit is to take place.

Menon is accompanying Manmohan Singh on his five-day tour abroad that will also take him to Kazakhstan.

“We (the member countries) are making a beginning… An agreement will be signed under which BRICS countries will be able to issue credit or grants to each other in own currency,” Menon said, adding this was the “first such step”.

Asked about Chinese efforts to make its currency an alternate to the US dollar, Menon denied there was any such proposal to make yuan as a reserve currency of BRICS nations.

He said it was an issue related to reform of the international monetary system, something the five countries cannot settle.

Commerce and Industry Minister Anand Sharma, who is also accompanying the prime minister, said: “we have not reached a stage to make a definite statement” on the issue.

Sharma said the BRICS will have a healthy global presence in the future as the member-countries are fastest growing economies and are projected to contribute 48 percent to the global economy in the next decade.

BRICS nations at present account for 40 percent of the global population and 20 percent of the global Gross Domestic Product (GDP).

Sharma said trade ministers of BRICS countries would meet Wednesday to discuss the international financial situation and the inputs from the meeting would go to the main summit a day later.

He said the BRICS states want to “restructure the global financial architecture” and make it representative in nature.

India was trying to increase exports as it aspires to more than double its total trade volume to $450 billion by 2014, he said. The trade volume in 2010-11 was $200 billion.

In this direction, India recently signed trade partnership agreements with Japan and Malaysia and was moving fast to sign similar pacts with Indonesia, Thailand and Canada, he said.

At the BRICS summit, its leaders - Manmohan Singh, China’s Hu Jintao, Brazil’s Dilma Rouseff, Russian President Dmitry Medvedev and South Africa’s President Jacob Zuma - will discuss their concerns on the international situation, financial, development and security issues and outline future cooperation.

The event is the third since the grouping was formed in 2009. Significantly, all the BRICS members are in the United Nation Security Council.