Contingent Reserve Arrangement (CRA)

During sixth BRICS summit held in Fortaleza, Brazil, on 15 July 2014 the participating nations announced signing of the Treaty for the establishment of the BRICS Contingent Reserve Arrangement (CRA) with an initial size of US$ 100 billion. This arrangement will have a positive precautionary effect, help countries forestall short-term liquidity pressures, promote further BRICS cooperation, strengthen the global financial safety net and complement existing international arrangements.

The Agreement is a framework for the provision of liquidity through currency swaps in response to actual or potential short-term balance of payments pressures.

It would have an initial pool of $100 billion, with China contributing $41 billion .India, Brazil and Russia will have equal contribution of $18 billion, and South Africa contributing the remaining $5 billion.

The CRA will act as Banker of last resort for BRICS nations. where by India, Brazil and Russia can draw an amount equivalent to their share ,South Africa can draw twice its contribution and China can draw one-half of its $41 billion contribution.

The CRA along with NDB will compliment the world bank and IMF providing alternate to developing nations along with putting pressure on developed countries to reform the brettenwood institutions.

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