On behalf of the Chinese Government, Governor Zhou Xiaochuan signed an international treaty for the establishment of a BRICS Contingent Reserve Arrangement (CRA) together with representatives of other BRICS countries on July 15, 2014, in Fortaleza, Brazil. The BRICS leaders witnessed the signing of the Treaty. This Contingent Reserve Arrangement will complement and reinforce the global financial safety net, which comprises the IMF, regional financial arrangements and bilateral swap agreements between central banks, in addition to the countries’ own international reserves.

The initial total committed resources under the CRA will be USD100 billion, composed of individual commitments as follows: China ($41 billion); Brazil, India and Russia ($18 billion each); and South Africa ($5 billion). The Contingent Reserve Arrangement, as a collective commitment, will make it possible for a participating country to receive liquidity support from other participating countries to alleviate the difficulty when encountering balance of payments pressure. The establishment of the Arrangement does not imply any outright transfer of international reserves. The committed resources will only be drawn through a currency swap if a country requests for assistance and meets certain conditions.

The CRA will become effective after all participating countries fulfill respective domestic procedures for its entry into force.

The initiative to establish the CRA was officially launched in June 2012 by the BRICS leaders at the margins of the G-20 Summit that took place in Los Cabos, Mexico. The signing of the CRA is a milestone, and represents a major endeavor by some emerging economies to establish a collective financial safety net in response to common global challenges beyond regional boundaries. It will add a new layer to the existing global financial safety net, help boost market confidence, provide a channel for countries to jointly cope with external shocks, and play an important role in promoting financial stability in the BRICS countries and the global economy.