- What is it?: The BRICS Contingent Reserve Arrangement (CRA) is a framework that provides liquidity and other support to BRICS nations in the event of short-term balance of payments crises.
- Formation: The CRA was signed in 2014 by the BRICS countries (Brazil, Russia, India, China, and South Africa) as part of the Fortaleza Declaration at the Sixth BRICS Summit.
- Purpose: The CRA aims to help BRICS nations avoid short-term balance of payments pressures, provide mutual support, and strengthen financial stability.
- Capital Commitment: The CRA has a $100 billion capital commitment to act as a guarantor of BRICS financial stability.
- How it Works: The CRA proposes to provide short-term liquidity support to members through currency swaps.
- Relationship to Other Institutions: The CRA is seen as a competitor to the International Monetary Fund (IMF) and is viewed as an example of increasing South-South cooperation. It complements existing international arrangements and contributes to strengthening the global financial safety net.