In a significant step towards enhanced economic cooperation, India, China, Russia, Brazil and South Africa today signed an agreement that will enable them to provide credit to each other in local currencies and collaborate in capital markets and other financial services.

The agreement was signed by the designated banks of the five countries at a Summit of Brazil-Russia-India-China-South Africa (BRICS) here which was attended by the Prime Minister, Dr Manmohan Singh.

The pact was signed in tune with the BRICS countries’ commitment to increased cooperation in economic, finance and trade matters to support their sustained national economic growth and contribute to the “long-term steady, sound and balanced growth of the world economy.”

“Our designated banks have signed a framework agreement on financial cooperation which envisages grant of credit in local currencies and cooperation in capital markets and other financial services,” Dr Singh announced at a joint press conference along with the Chinese President, Mr Hu Jintao, the Russian President, Mr Dmitry Medvedev, the Brazilian President, Dilma Rousseff and South African President, Mr Jacob Zuma.

Earlier, addressing the summit, Dr Singh said the challenge before the BRICS countries was to harness the vast potential that exists among them as all are rich in resources, material and human.

“We have the opportunity to give concrete meaning to the concept of sustainable and balanced development, and produce innovative models of development,” he said. Dr Singh said India stood ready to work with other BRICS countries to realise these goals.

“Our economy is more open and more connected to the world than it has been in the past. Our financial and capital markets are sound, and eager to absorb foreign direct investment.”

He remarked that BRICS had travelled a long distance in a short span of two years since the first summit in 2009.

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