The Contingent Reserve Arrangement (CRA) of BRICS nations viz. Brazil, Russia, India, China and South Africa was declared operational.
It was announced by Union Finance Minister Arun Jaitley who had chaired the Governing Council meeting of the BRICS’ CRA in New York, United States.
What is BRICS Contingent Reserve Arrangement (CRA)?
- CRA was established in 2015 during 7th BRICS summit in July 2015. The Treaty for the establishment of BRICS CRA was signed at Fortaleza, Brazil in July 2014.
- It is a framework that aims at providing support through additional liquidity and other means to BRICS countries at a time of economic crisis.
- It will be providing support to BRICS countries through liquidity and precautionary instruments in response to actual or potential short-term balance of payments pressures.
- The initial total committed resources of the CRA will be 100 billion dollars with individual commitments as follows: China ($41 billion), India ($18 billion), Brazil ($18 billion), Russia ($18 billion) and South Africa ($5 billion).
- The CRA is generally seen as a competitor to the International Monetary Fund (IMF) and along with BRICS New Development Bank (NDB) is viewed as an example of increasing South-South cooperation.
- Both CRA and NDB were annoucned as part of BRICS Fortaleza Declaration announed during 6th BRICS summit held in Fortaleza, Brazil in July 2014.
Commonwealth Finance Ministers’ Meeting
Union Finance Minister Arun Jaitley also had chaired the Commonwealth Finance Ministers’ Meeting at the International Monetary Fund (IMF) headquarters in Washington DC, US.
During the meeting, two important issues were discussed and deliberated. They are (i) International Taxation-a Commonwealth Conversation around the Panama Paper (ii) Economics of Climate Change and Financing Climate Adaptation and Mitigation.