* Leaders to decide between Shanghai and New Delhi for
* BRICS summit to be held July 15-16 in Brazil
* BRICS to sign a framework agreement on forex fund
By Lidia Kelly
MOSCOW, July 9 Leaders of the BRICS nations will
launch their long-awaited development bank at a summit next week
and decide whether the headquarters should be in Shanghai or New
Delhi, Russian Finance Minister Anton Siluanov said on
The creation by Brazil, Russia, India, China and South
Africa of a $100 billion bank to finance infrastructure projects
has been slow in coming, with disagreements over its funding,
management and headquarters.
"The (headquarters) issue will be decided on the level of
the heads of the countries," Siluanov told journalists, adding
that the choice is between China's Shanghai and India's New
Delhi. BRICS leaders will meet July 15-16 in the Brazilian
coastal city of Fortaleza.
The launch of the bank will be the group's first major
achievement after struggling to take coordinated action
following an exodus of capital from emerging markets last year,
triggered by the scaling back of U.S. monetary stimulus.
The new bank will symbolize the growing influence of the
BRICS, something that Russia has hoped for after the West
imposed sanctions on Moscow in the spring for annexing part of
Ukraine and its continued involvement in the country's crisis.
Capitalisation of the new bank has been a major sticking
point, but Siluanov confirmed that the funding would be divided
equally, with an initial total of $10 billion in cash over seven
years and $40 billion in guarantees.
The $50 billion will be eventually built up to $100 billion,
and the bank will be able to start lending in 2016, he said.
The bank was first proposed in 2012. The proposal was
approved last year at a BRICS summit in South Africa but failed
to be launched during the meeting in Russia last autumn of the
Group of 20 developed and developing nations.
The bank will be open to other countries that are United
Nations members, but the BRICS share is never to decline below
55 percent, Siluanov said.
The chairmanship, with a term of five years, will rotate
among the members, but the first chairmanship is yet to be
decided, Siluanov said.
FRAMEWORK AGREEMENT ON CURRENCY POOL
The heads of the BRICS will also sign a blueprint agreement
on the group's other project - a $100 billion fund to steady the
currency markets, which has also been off to a slow start.
The initiative became more acutely needed after an inflow of
cheap dollars fuelled a boom in the BRICS for a decade and then
reversed to a sharp outflow last year.
"We have reached an agreement that, in current conditions of
capital volatility, it is important for our countries to have
this buffer in addition to the International Monetary Fund,"
But the framework agreement to be signed in Brazil will not
include any direct commitments, which are due to come later when
the central banks sign agreements.
A senior Brazilian official who participates in the
negotiations said the pool could become operational as soon as
According to the agreement, the cash will continue to be
held in the reserves of each BRICS country, but it can be
transferred if needed to another member to soften volatility in
its foreign exchange market.
China, holder of the world's largest foreign exchange
reserves, will contribute the bulk of the contingency currency
pool, or $41 billion.
Brazil, India and Russia will chip in $18 billion each and
South Africa $5 billion.
"It is to be a mechanism that could react swiftly to capital
outflow by offering swap operations .. in dollars," Siluanov
If a need arises, China will be eligible to ask for half of
its contribution, South Africa for double and the remaining
countries the amount they put in.
"Some countries may put in less, but their needs are also
greater, proportionally," Siluanov said.
A BRICS member would be able to immediately get 30 percent
of its eligible share and the remaining 70 percent only with a
stabilisation programme from the IMF, Siluanov said.
(Additional reporting by Alonso Soto in Brasilia; Writing by
Lidia Kelly; editing by Jane Baird)