BRICS countries formed their own monetary fund

The countries from the BRICS reorganisation officially launched into own Monetary Fund worth 100 bln. Dollars with which to help each other in case of financial problems. This week, members of the group Brazil, Russia, India, China and South Africa held a meeting in the Russian city Ufa.

According to statement of the governor of the Russian Central Bank Elvira, the Fund constitutes a "security tool" for the five countries and will enter into force on 30 July. China will have the largest capital - 41 billion Dollars. Brazil, Russia and India will participate with  18 billion Dollars, and South Africa - 5 billion.

Money will not be transferred from currency reserves of the countries until new needs appear. China, Russia and India have already ratified and the capital of BRICS bank is expected to reach 100 billion Dollars. According to the head of the Russian bank VTB Andrey Kostin there is a "growing interest" BRICS countries to start using local currencies in trade relations.

According to Nibulina the fund is intended to solve "short-term liquidity problems and balance of payments." She gives an example of when it may be needed similar buffer like the  crisis in 1998, when Russia collapsed on its debt in local currency. However,  Nibulina assures that the country sees no need and no intention to use the new fund soon. Last year, Russia consumes nearly 90 billion Dollars from its reserves to control the sharp devaluation of the ruble.