The BRICS nations have signed an agreement to start a new Development Bank with 100 billion US dollars. This was announced in Fortaleza, Brazil when the Fortaleza Declaration was issued on 15th of July.

The first president of the bank will be from India whereas its headquarters will be located in Shanghai, China. The BRICS leaders, through the Declaration asked their respective finance ministers to work out the modalities for its operationalization.

Our correspondent reports from Brazil that a treaty for the establishment of the ‘BRICS Contingent Resrve Arrangement’ with an initial size of US$ 100 billion was also signed by the member countries on this occasion.

This arrangement will have a positive precautionary effect, help countries forestall short term liquidity pressures and strengthen the global financial net.

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

Besides, several other treaties were signed by member nations including the Memorandum of Understanding on Cooperation among BRICS Export Credit Guarantee Agencies.

The treaty envisages improving the support environment for increasing trade opportunities among member countries.