IT WOULD be preferable for Brics member states to use their own contingent reserve for their short-term balance of payments difficulties rather than rely on International Monetary Fund (IMF) aid — which is usually tied to conditions — Treasury director-general Lungisa Fuzile said this week.
The Brics — Brazil, Russia, India, China and SA — contingent reserve arrangement forms part of the initiative to establish a New Development Bank. The launch of the bank is expected to take place at the next Brics summit in Russia in July.
The parliament of each Brics member country will have to ratify the agreement to establish the bank, a process that is under way in Parliament in Cape Town.
Mr Fuzile said in a briefing to Parliament’s standing committee on finance on the new bank, that next year’s budget would probably have to provide for about R1.5bn as the first tranche of its $10bn contribution to the institution, which will have an initial subscribed capital of $50bn shared equally among founding members.
The bank’s founding documents prescribe the payment of $2bn in seven instalments with the first due six months after the last instrument of ratification is received.
Treasury director-general Lungisa Fuzile. Picture: FINANCIAL MAIL
IT WOULD be preferable for Brics member states to use their own contingent reserve for their short-term balance of payments difficulties rather than rely on International Monetary Fund (IMF) aid — which is usually tied to conditions — Treasury director-general Lungisa Fuzile said this week.
The Brics — Brazil, Russia, India, China and SA — contingent reserve arrangement forms part of the initiative to establish a New Development Bank. The launch of the bank is expected to take place at the next Brics summit in Russia in July.
The parliament of each Brics member country will have to ratify the agreement to establish the bank, a process that is under way in Parliament in Cape Town.
Mr Fuzile said in a briefing to Parliament’s standing committee on finance on the new bank, that next year’s budget would probably have to provide for about R1.5bn as the first tranche of its $10bn contribution to the institution, which will have an initial subscribed capital of $50bn shared equally among founding members.
The bank’s founding documents prescribe the payment of $2bn in seven instalments with the first due six months after the last instrument of ratification is received.
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