BRICS Contingent Reserve Arrangement – UPSC Prelims

BRICS Contingent Reserve Arrangement (CRA)?
  • CRA was established in 2015 during 7th BRICS summit as a part of the Fortaleza Declaration.
  • Aim: It aims to provide short-term liquidity support to the members through currency swaps. It will help to mitigate the Balance of Payment(BOP) crisis situations in case such a situation arises.
  • Other objectives:
    • It will help member countries to forestall short-term liquidity pressures,
    • Moreover, it will provide mutual support and further strengthen financial stability.
    • It would also contribute to strengthening the global financial safety net and complement existing international arrangements (from IMF) as an additional line of defence.