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Moscow - The Brics group of developing nations, meeting in Russia to bolster ties, said they’re disturbed by the turbulence that’s roiled global markets from energy to stocks.
“We’re concerned about instability in the markets, the high level of volatility in the prices of energy and raw materials, and the accumulation of sovereign debt of a number of major countries,” Russian President Vladimir Putin said in the city of Ufa, in the east of Moscow. “All these structural imbalances directly affect growth.”
The summit of leaders from Brazil, Russia, India, China and South Africa also discussed creating their own credit-ratings company and nurture direct investments between each other. Finance officials from the five nations earlier finalised a $100bn reserves pool to ease liquidity issues during market stress and are forming a development bank.
The Brics, coined in 2001 by ex-Goldman Sachs economist Jim O’Neil, gathered as a stock rout in China and uncertainty over Greece’s euro future trigger gyrations in global financial markets. Energy prices have been particularly jarred: the Chicago Board Options Exchange Crude Oil Volatility Index signaled the most volatile trading in 12 weeks on Wednesday.
Having erased $3.9trn in less than a month, Chinese shares gained 5.8% Thursday. Russia’s ruble, the second- worst performer against the dollar in the past year, strengthened 0.8% in Moscow as Brent oil prices advanced more than 3%, data compiled by Bloomberg showed.
Bond Buying
Chinese President Xi Jinping said global economic growth is slowing, and instability and uncertainty are on the rise. As the headwinds grow stronger, Brics countries have the potential to develop ties, he said.
The Brics talked up trade and investment ties. Russian Finance Minister Anton Siluanov said in an interview with state television that Chinese investors had bought as much as 60 billion rubles ($1.1bn) of local-currency bonds.
The nations also talked about building their own ratings company because US-based assessors have “political” bias, Russian Economy Minister Alexei Ulyukayev told state television. Russia has complained its ratings are unjustified after downgrades to junk by Moody’s Investors Service and Standard & Poor’s amid the first recession in six years.
The BRICS may meet next in November, during a G-20 gathering in Turkey, Russian Deputy Foreign Minister Sergei Ryabkov said.
