CHENNAI: Former governor of the Reserve Bank of India C Rangarajan said bonds floated by the New Development Bank promoted by the BRICS nations (Brazil, Russia, India, China and South Africa) must have liquidity and be marketable. The New Development Bank (NDB), being created by Brazil, Russia, India, China and South Africa, will have an initial equity capital of $ 10 billion each. The basic objective of the NDB is to mobilize resources for infrastructure and sustainable development in the BRICS and other emerging economies and developing countries. While developing countries have been growing fast in recent years, the management structure of multilateral financial institutions (like the IMF) in such institutions does not reflect the changing structure of the global economy, Rangarajan said. He added that the BRICS nations had only 11% voting power in the International Monetary Fund. Rangarajan also stated that there was a growing need for establishing an additional institution to meet the growing infrastructure needs of developing economies. The Assocham study cautioned India about Chinas influence on the BRICS Bank. India has to seek a balance outside China-led or likely dominated structures, while remaining a relevant voice within them, the study noted. According to the study, by its sheer financial muscle power of $ 3.8 trillion of foreign exchange currency reserves, China wields influence over critical components of major financial channels.
Posted on: Fri, 26 Dec 2014 20:00:48 +0000
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