BRICS Contingent Reserve Arrangement

The BRICS Contingent Reserve Arrangement, or CRA, is a financial safety net through which participating BRICS countries support one another during short-term balance-of-payments pressures. Established by a 2014 treaty, it provides access to US-dollar liquidity through central-bank currency swaps rather than through ordinary development lending.

Purpose and resource commitments

The CRA has initial committed resources of US$100 billion. China committed US$41 billion; Brazil, Russia and India committed US$18 billion each; and South Africa committed US$5 billion.

• The commitments determine members' maximum access, subject to treaty multipliers: China can access US$20.5 billion; Brazil, Russia and India US$18 billion each; and South Africa US$10 billion.

How support is provided

A member facing actual or potential short-term external financing pressure may request support through a liquidity instrument or a precautionary instrument. Support is executed as a currency swap: the requesting central bank obtains US dollars from providing members in exchange for its domestic currency, with an obligation to reverse the transaction later.

• The liquidity instrument addresses an existing balance-of-payments pressure, while the precautionary instrument provides support against a potential pressure.
• The arrangement supplements members' foreign-exchange reserves and other international financial safety nets; it does not finance development projects.

Access conditions and governance

Up to 30 per cent of a member's maximum access is available through the de-linked portion. Access beyond this level is the IMF-linked portion, which requires evidence of an on-track arrangement with the International Monetary Fund involving conditionality.

• A Governing Council oversees strategic matters, while a Standing Committee handles operational and country-support decisions.
• Central banks act as the operational counterparts for swap transactions, monitoring, repayment and renewals.