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* Brazil to test BRICS resolve for euro zone aid
* China, South Africa, India cautious over plan
* Greek minister says seen no buying up to now
* Brazil itself limited options to buy euro bonds (Recasts, edits, adds details throughout)
By Raymond Colitt and Rajesh Kumar Singh
BRASILIA/NEW DELHI, Sept 14 Brazil's proposal to support the crisis-hit euro zone garnered only lukewarm support from fellow BRICS countries on Wednesday, as doubts mounted whether the five emerging market powers have the political will or financial clout to throw a lifeline to Europe.
Brazil's president, Dilma Rousseff, reiterated on Wednesday that her country was ready to join an international rescue effort, a day after officials said Brazil was in preliminary talks with the four other members of the BRICS group -- Russia, India, China and South Africa -- to make coordinated purchases of bonds of euro zone countries.
Aides for Brazilian Finance Minister Guido Mantega had said he would contact his BRICS colleagues to gauge the level of support before they meet on Sept. 22 on the sidelines of meetings of the World Bank and International Monetary Fund in Washington.
But doubts quickly emerged whether the diverse group would have the political will to come up with a plan with enough financial muscle to make a real difference as the possibility grows of Greek debt default.
A central bank adviser in China urged Beijing on Wednesday not to buy large amounts of euro area bonds, and South Africa's finance minister suggested his country might not have the financial firepower to support a bond-buying plan. India said it was "cautious," and Russia appeared to dismiss the proposal.
Russian President Dmitry Medvedev's chief economic adviser, Arkady Dvorkovich, told Reuters that the Group of 20 would be a more appropriate forum to address the euro zone crisis [ID:nL5E7KE2MG].
Greece said so far BRICS countries had shown little interest in covering the country's borrowing needs through the T-bill sales program. "Despite the invitation, we have found there was little or no participation at all," Deputy Finance Minister Filippos Sachinidis told radio station Real FM.
Graphic on reserves http:/link.reuters.com/cyj73s
Euro zone debt stories [ID:nL6E7HL0JK]
Even Brazil faces limitations, raising suspicion that its offer of support is a largely self-serving initiative aimed at furthering its aim of gaining a bigger voice in international financial institutions. [ID:nS1E78D07C]
Brazil's $352 billion in foreign reserves can only be used for investment-grade assets and would likely be off-limits for European bond purchases, an official told Reuters. At the end of 2010, 82 percent of its reserves were in U.S. Treasuries.
A government official told Reuters on Tuesday that Brazil's sovereign wealth fund would be a more likely source of funding -- but with a value of $9 billion it would need a substantial boost from the country's Treasury to be much help to Europe.
"The magnitude of the European crisis is so large," said Abheek Barua, chief economist at HDFC Bank in New Delhi. "Unless there's sort of massive buying, then it won't make a difference."
Even five weeks of bond buying by the European Central Bank, to the tune of 70 billion euros, has not turned investor sentiment over the debt crisis, which is now threatening Italy.
Chinese Premier Wen Jiabao said his country, the world's second-biggest economy, was willing to help its main trade partner, but the euro area in turn needed to contain the debt crisis.
With about $3.2 trillion in foreign exchange reserves, a quarter of which analysts estimate is in euro-denominated assets, China does have the firepower to make a difference.
"The governments of all countries must truly shoulder their responsibilities and deal properly with their own affairs," Wen said in a speech at the World Economic Forum in Dalian, China, although he made no direct mention of a BRICS plan.
Central bank adviser Li Dakui suggested China should focus on its own economy. "We have more than our share of trouble to deal with," Li said, referring to concerns in China about inflation and asset bubbles.
TOO SMALL TO MATTER?
The other BRICS members offered little hope of supporting a meaningful effort to support Europe.
Because 45 percent of Russia's $543 billion reserves are already in euro-denominated assets, the central bank has no room to increase holdings of euro zone debt at will, Finance Minister Alexei Kudrin told Reuters on Tuesday.
South African Finance Minister Pravin Gordhan said his country lacked significant reserves, so it was undecided about buying euro area bonds. Net gold and currency reserves were just under $50 billion in August. [ID:nL5E7KE0YZ]
New Delhi would be "cautious" about supporting a plan, said an Indian Finance Ministry official, who declined to be identified. [ID:nL3E7KE10Z] India holds about 20 percent of its $320 billion in foreign currency assets in euro debt, and a senior Indian official said that proportion would not change.
"All I can tell you is we will maintain the 20 percent ratio," the official said.
Global policy coordination would also be difficult because countries are at different stages of the economic cycle, Indian Finance Minister Pranab Mukherjee said.
Brazilian financial newspaper Valor reported on Tuesday that bond purchases could be limited to debt from the more financially solid European nations.
The head of the International Monetary Fund, Christine Lagarde, said she hoped that would not be the case.
"My hope is that if they happen, these interventions will be of wide scope and not limited to the safe bonds of a few states," she was quoted as saying on Wednesday by Italy's La Stampa newspaper. [ID:nL5E7KE05S] (Additional reporting by Reuters correspondents in Cape Town, Milan, Sao Paolo, Singapore, Mumbai, London and Dalian, China; Writing by Raymond Colitt and Neil Fullick; Editing by Stuart Grudgings and Leslie Adler)