Sanya - The five Brics nations discussed reform of the international monetary system at a meeting in southern China on Thursday, but steered clear of the contentious topic of the Chinese exchange rate, a senior Chinese official said.
Wu Hailong, an assistant Chinese foreign minister, said the leaders of Brazil, Russia, India, China and South Africa had also discussed the composition of the Special Drawing Right, the International Monetary Fund’s unit of account.
“The yuan exchange rate was not on the agenda of this Brics summit meeting, but the reform of the international monetary system is one of the key issues of the meeting,” Wu told a news conference.
Brazil’s President Dilma Rousseff has faced complaints at home from manufacturers and officials, who say China’s cheap yuan currency is undercutting domestic production and that China is soaking up Brazil’s commodities such as iron ore, but not buying value-added products.
Still, the five Brics nations took another step towards cementing their global influence on Thursday, calling for a broad-based international reserve currency system “providing stability and certainty”.
“The five countries agreed to discuss the role of the SDR in the current international monetary system, including the composition of the SDR currency basket,” Wu added.
And the development banks of the five Brics nations agreed in principle to establish mutual credit lines denominated in their local currencies, not in dollars.
“Trade settlement in local currencies among the five countries will promote trade and investment liberalisation. It will lead to even closer business and trade ties among these five countries,” Wu said.
On the issue of whether the Brics would expand again to include other large, developing nations - South Africa joined the summit for the first time this year - Wu said there had been no concrete decisions.
“A fair number of countries have expressed interest in joining the Brics. This shows that the mechanism is dynamic and attractive. At the meeting, the leaders discussed enlargement, and agreed that any decision will be made based on consensus of all members of the Brics.”
Wu also played down any political rifts between the existing member states, made up of authoritarian regimes such as China and the vibrant democracies of India and Brazil.
“What’s important now is to broaden consensus as much as possible and tone down differences, and start cooperation in fields where there is already consensus,” he said.
“For those issues where there are differences, we will put them aside for the time being. We will not let those differences undermine solidarity and impede cooperation among Brics countries.”