Los Cabos: India, Brazil, Russia, China and South Africa Monday explored mechanisms, such as swap arrangement and a reserve fund. to protect their currencies against external risks.
The mechanisms were discussed during an informal meeting hosted by Prime Minister Manmohan Singh among the leaders of BRICS nations on the margins of the G20 Summit here, according to a statement issued Monday.
"They (G20 leaders) agreed to ask their finance ministers and central bank governors to work on this important issue, in a manner compatible with internal legal frameworks, and report back to the leaders at the 2013 BRICS Summit."
Under swap arrangements, one country with a weaker currency seeks to hedge the exchange rate risk by swapping it with another currency with the hope that the transaction will be settled when the situation improves.
Besides Manmohan Singh, the meeting was attended by Brazilian President Dilma Rousseff, Russian President Vladimir Putin, Chinese Premier Wen Jiabao and South African President Jacob Zuma.
The leaders primarily discussed the current global financial crisis and felt the trouble in Eurozone threatened financial and economic stability across the world, and required cooperative solutions.
In this context, they agreed to increase their contributions to global financial institutions such as the International Monetary Fund. India, later announced USD 10 billion to the institution.