BRICS to commit $100 billion to FX fund, completion a way off

Thu Sep 5, 2013 6:42am EDT
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* China says will contribute lion's share

* Fund to be announced at G20 summit

* Officials warn much still work to do before operational

* India urged to tackle external deficits

By Lidia Kelly and Alessandra Prentice

ST. PETERSBURG, Russia, Sept 5 (Reuters) - The BRICS group of emerging economies will contribute $100 billion to a fighting fund to steady currency markets destabilised by an expected pullback of U.S. monetary stimulus, China and Russia said on Thursday.

China, holder of the world's largest foreign exchange reserves, will contribute the lion's share of the currency pool. But it will be much smaller than the $240 billion originally envisaged and officials said it would not be functional for some time yet.

Cheap dollars that fueled a boom in Brazil, Russia, India, China and South Africa over the past decade have turned tail since Ben Bernanke, chairman of the Federal Reserve, warned in May of a 'taper' in the U.S. bond-buying scheme.

"The scale of the reserve arrangement will be $100 billion and China will take the lion's share of this," China's Vice Finance Minister Zhu Guangyao told a briefing at the Group of 20 summit in St. Petersburg, Russia.   Continued...