Kazan [Russia], October 23 : The leaders of BRICS nations reaffirmed their commitment to strengthening financial cooperation and expanding the use of local currencies in a bid to enhance economic stability and promote development.
The announcement was made in the Kazan Declaration, titled 'Strengthening Multilateralism for Just Global Development and Security', issued at the conclusion of the BRICS Summit on Wednesday, an official press release by the Ministry of External Affairs stated.
The leaders stressed the importance of bolstering cross-border financial practices and deepening economic ties among member countries. They reiterated the growing need to reform the international financial architecture to make it more inclusive and equitable.
The use of local currencies in trade and financial transactions was highlighted as a key instrument for reducing vulnerabilities and mitigating the impact of external economic shocks on emerging and developing economies.
"We welcome the use of local currencies in financial transactions between BRICS countries and their trading partners. We encourage the strengthening of correspondent banking networks and enabling settlements in local currencies," the declaration stated.
This emphasis on local currencies follows the BRICS Cross-Border Payments Initiative (BCBPI), aimed at streamlining payments and minimising trade barriers among member states, stated the press release.
Additionally, the New Development Bank (NDB), a major financial institution established by BRICS, was recognised for its crucial role in promoting infrastructure and sustainable development. The Declaration praised the NDB's efforts in expanding local currency financing and employing innovative investment tools. Leaders underscored the bank's commitment to enhancing capacity building and knowledge exchange, which are essential for achieving sustainable development goals.
The Kazan Declaration also highlighted the challenges faced by developing nations in managing debt burdens. High interest rates and tighter global financing conditions have exacerbated vulnerabilities in many countries. In response, BRICS leaders called for the coordinated implementation of the G20 Common Framework for Debt Treatment to support sustainable development.
The BRICS nations also welcomed the formation of a BRICS Interbank Cooperation Mechanism (ICM) to explore innovative financial practices, particularly in facilitating financing for infrastructure projects. The ICM will continue to work alongside the NDB to develop effective financial mechanisms and platforms that can increase the flow of investment into BRICS and other developing nations, the press release stated.
The summit's outcomes reaffirmed BRICS' role as a pivotal bloc in global financial governance. Leaders emphasised the importance of fostering inclusive, sustainable economic growth through continued financial cooperation, innovative cross-border payment systems, and the use of local currencies in trade to safeguard the bloc's economic future.
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