BRICS development bank & local currencies

The concept of a BRICS development bank, prima facie, looks a jolly good idea. The top five emerging economies which account for around 40% of the world’s population and contribute to over 20% of world GDP and a quarter of world trade are putting together a bank which helps not just these nations but others too. Financing is proposed to be through local currencies which will add to the flow of trade and free borrowers/ traders from the vicissitudes of the euro-dollar movements, thus lowering transaction costs. This helps the nations at the time of crises besides supporting growth in normal times by providing finance for infrastructure and other projects.

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