"They have concluded that the establishment of a self-managed contingent reserve arrangement would have a positive precautionary effect, help BRICS countries forestall short-term liquidity pressures, provide mutual support and further strengthen financial stability.
"It would also contribute to strengthening the global financial safety net and complement existing international arrangements as an additional line of defense," the statement said.
"BRICS leaders are of the view that the establishment of the CRA with an initial size of 100 billion U. S. dollars is feasible and desirable, subject to internal legal frameworks and appropriate safeguards. We direct our Finance Ministers and Central Bank Governors to continue working towards its establishment."
BRICS finance ministers and central bank governors will negotiate and conclude the agreements in relation to the New Development Bank and the Contingent Reserve Arrangement.
"We will review progress made in these two initiatives at our next meeting in September 2013," BRICS leaders said in the statement.
In a related development, the Development Bank of Southern Africa (DBSA) on Wednesday lauded the establishment of the BRICS Development Bank.
BRICS is an acronym for Brazil, Russia, India, China and South Africa.
DBSA Chief Executive Officer Patrick Dlamini said the BRICS development bank will go a long way to ensure Africa infrastructure development.
"This bank would ensure that the infrastructure development needs of member states, in particular Africa gets much needed infrastructure funding to address infrastructure gaps on the continent," Dlamini said in a statement.
DBSA is a development finance institutions in southern Africa set to accelerate sustainable socio-economic development by funding physical, social and economic infrastructure. DBSA is southern Africa's leading developmental finance institute set to spearhead infrastructure development in the region.
Dlamini said the creation of the bank from the BRICS block would not pose any direct threat to DBSA as a regional infrastructure bank. He, however, acknowledged that the funding requirements for infrastructure in Africa "are far too huge."
"We therefore welcome and appreciate the establishment of this bank from the BRICS block as it would play a critical role in advancing infrastructure funding to promote development and regional integration on the continent," Dlamini said.
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