BRICS to secure financial stability of member-states

The BRICS summit held in Brazil last week showed how promising the project really is. Before that, the body had no common strategy, no common goals. It was more of a discussion platform than an actual integration project. It's understandable, because the BRICS unites countries with very different cultural and political backgrounds. That is why the current integration process mainly concerns the sphere of finance, as financial laws is common to all countries.

The head of the Oriental Studies Department of the Higher School of Economics, Alexey Maslov, notes that last year China suggested establishing a currency fund, which would operate in a similar way to the IMF. "It was a crucial moment. China and Russia declared that they are ready to establish a new financial body which would fundamentally change the world's financial system. Today the US dollar is not only the most convertible currency, but the currency in which the majority of payments are being made. The vast majority of deals are signed in US dollars. For five years now China has been trying to replace this system with a system of direct payments in national currencies without using US dollars. China has already launched such a system with Australia and New Zealand. Russia signs deals with China in yuan, South Korea and China both accept each other's currencies. One half of China's deals with Brazil are also signed in yuans," the expert said.

Thus, according to Maslov, the BRICS are going to secure the financial stability of the member-states with the help of a twofold system. 'On the one hand, a currency Reserve Fund is going to be established. That will secure the financial stability of the member-states. This fund may be used to provide countries facing a default with money. I addition to this, the fund will use yuans instead of US dollars. However this strategy may also be risky, since the Chinese economy may also face a crisis," he said.

In the framework of his Latin American tour Russian President Vladimir Putin paid a visit not only to Brazil, but also to other countries of the region. Ambassador Valery Morozov believes that Russia demonstrates a well-prepared policy towards Latin America. "Our policy towards the region is well-based and has just entered a new stage of its development. The president has met with practically all regional leaders. I believe we have strong allies in Latin America," the diplomat said.