ABSTRACT
The nonconventional monetary-related initiatives among the Brazil, Russia, India, China and South Africa (BRICS) members were apparently designed to set up a framework for trade payments, especially for reducing transaction costs through improved financial intermediation and trade finance. The system of international financial arrangements, where the International Monetary Fund is complemented by an array of regional institutions, notably in Latin America and the Caribbean, has shown the advantages of diversity in adapting to the demands of specific regions. The BRICS needs a common arrangement to forestall external shocks besides existing international financial arrangements, to provide its economies with some insurance against the risk of liquidity runs in global turbulence. Global crises have diverging and damaging effects on BRICS economies, which have common concerns about liquidity support should short-term balance-of-payment pressures arise. The exchange rate discrepancies among the BRICS countries also revealed differences in macroeconomic policy and depict their effects on the competitiveness of national producers.
