BRICS warns against US monetary stimulus withdrawal
St Petersburg: Echoing the views articulated by Prime Minister Manmohan Singh, the BRICS nations today warned that imminent withdrawal of monetary stimulus by the US could have "unintended negative spillovers" on the global economy.
Ahead of the summit of the Group of 20 industrialised and major emerging economies, Prime Minister Singh had emphasised the need for an "orderly exit" from unconventional monetary policies being pursued by the developed world to avoid "damaging" growth prospects of the developing world.
A media note on the informal meeting of BRICS leaders ahead of the G20 Summit said, "In light of the increase in financial market and capital flow volatility during recent months, the BRICS Leaders reiterated their concerns they had expressed in the Durban Summit in March, regarding the unintended negative spillovers of unconventional monetary policies of certain developed economies."
"They emphasised that the eventual normalisation of monetary policies needs to be effectively and carefully calibrated and clearly communicated," it said.
BRICS comprises of Brazil, Russia, India, China and South Africa.
With the five countries in the BRICS bloc hard hit by slow economic growth, host Russia and China, also articulated their concerns separately about the planned 'tapering' of the US Federal Reserve's multi-billion dollar monetary stimulus policy.
As both economic issues, especially the slowdown in the BRICS bloc and Syria are set to top the agenda, the host country and China highlighted the fallout of the imminent phasing out of the monetary stimulus package which had helped the emerging economies by providing liquidity at the height of the 2008 financial crisis.
Zhu Guangyao, China's deputy finance minister, asked the US to be "mindful" of the spillover effects and work to contribute to the stability of the global financial markets and the steady recovery of the global economy.
However, he appeared to rule out the possibility of a bailout for any country in any financial difficulty.
After the value of rupee fell by 20 percent to a dollar this year, India had mooted joint forex intervention by the major emerging economies.
India, has not approached the other BRICS countries despite issuing a public appeal last week for joint forex intervention after the rupee rout, Russia's summit coordinator Ksenia Yudayeva said.