Argentina to join the BRICS Bank

Argentina will join the New Development Bank, also known as the BRICS Bank.

This was announced by the head of the institution, Dilma Rousseff, to the Minister of Economy, Sergio Massa, during his visit to the financial institution in the Pudong district of Shanghai.

The New Development Bank (NDB) is a multilateral development bank created on July 15, 2014, by Brazil, Russia, India, China, and South Africa (BRICS) as an alternative to the existing World Bank and International Monetary Fund.

Its primary purpose is to finance development projects and infrastructure within the five BRICS countries, holding US$2,800 billion, or 42% of the world’s foreign exchange reserves.

This is an important decision for Argentina in many ways, especially because of the financial support the crisis-stricken country will have access to through membership in the bank.

The decision to join will be made at the next meeting of the NDB in South Africa during the first week of August.

To become a member, the bank will receive a capital contribution of US$250 million from the Argentine government through government bonds held by the Treasury, the Anses Guarantee and Sustainability Fund, and other sources, the Ministry of Economy confirmed.

This amount represents 25% of the total injection of US$1 billion that the financial institution will receive within two months, as the meeting in South Africa will decide to add three more countries to the NBD: Saudi Arabia – whose financial assets are rated with the initials “AAA” as the highest quality – Egypt and Zimbabwe.

Rousseff, former president of Brazil, also told the economy minister that she thought Argentina’s admission to the NDB made the most sense in the short term.

“It is the fastest way to do it directly in August,” Rousseff told the press.

Rousseff’s intervention was not limited to delivering this message.

She also informed Massa, Máximo Kirchner, and Pesce that Brazil would explicitly demand and defend Argentina’s inclusion in the BRICS Bank.

The country’s admission will be discussed by the “governors” of all bloc members’ financial institutions (ministers and central bank heads).

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