FORTALEZA, Brazil, July 16 (UPI) -- Brazil, Russia, India, China and South Africa announced the start of a development bank at their Fortaleza, Brazil, summit.
The New Development Bank, to be headquartered in Shanghai and started with a capitalization of $50 billion, will serve the countries -- regarded as emerging nations and collectively known by the acronym BRICS -- in a capacity similar to the World Bank or the International Monetary Fund. Currency reserves of $100 billion will also be available to members for balance of payments issues, the bloc said Tuesday.
The fund could ease any issues regarding a possible interest rate increase in the United States, Brazilian President Dilma Rousseff said, adding, "This provides security, a kind of safety net for BRICS countries and others."
The bloc encompasses half the world's population, and China possesses 70 percent of the collective gross domestic product of the five nations involved. While China downplayed its clout at the summit, analysts said China's current trade surplus with the other countries could be an issue in the future.
"There may be potential cracks in the facade of unity once China asserts its interests," said Eric Farnsworth of the Council of the Americas and the Americas Society in the United States.