Bank agreements to boost BRICS' trade, investment

China Development Bank and its BRICS' counterparts will sign agreements Thursday to formalize cooperation in local currency lending, in a bid to further facilitate trade and investment among the five countries, Chen Yuan, the bank's chairman, said in New Delhi Wednesday.

Under the agreements each country will make its own currency loans available to the other four member countries.

"Using our own currencies to issue loans and settle payments can minimize exposure to exchange rate fluctuations, reduce our reliance on third-party currencies, and facilitate trade and investment," Chen said at a meeting with the bank's Brazilian, Russian, Indian and South African counterparts.

Trade among BRICS countries grew in the past decade. From 2001 to 2010, inter-BRICS trade soared at an average annual growth of 28 percent. Total trade among the five stood at US$230 billion in 2010.

The agreements will also be important outcome documents for the BRICS summit, bearing far reaching significance in deepening financial cooperation, Chen said at a press conference later in the day. Chen did not specify the amount of lending, but he believed "the sum will be considerable."

The pacts to be signed were applauded by bank leaders of other BRICS countries.

"The two agreements will for sure assist us in promoting our bilateral trade and investment and improve the trade facilities which we are extending to each other," Vladimir Dmitriev, chairman of Vnesheconombank, said.

"It is important for BRICS countries to trade in an environment that is not volatile, particularly on currencies," said Jabulani Moleketi, chairman of Development Bank of Southern Africa.

Leaders from the BRICS bloc are in New Delhi for a two-day summit which opens today under the theme of their commitment to a partnership of stability, security and prosperity. It is the fourth annual meeting of the still relatively young mechanism.