BRICS to decide on euro support at Washington meeting

Finance ministers of the BRICS countries will take a call on supporting the euro zone at a meeting in Washington later this month, a senior official in India's finance ministry said.

The BRICS major emerging economies are in preliminary talks on increasing their holdings of euro-denominated bonds to help ease Europe's debt crisis, a senior Brazilian government official told reporters yesterday.

"The idea has been thrown open by the Brazilian finance minister. The BRICS finance ministers will take a call when they meet on 22nd September in Washington," R. Gopalan, India's economic affairs secretary, told reporters on Wednesday.

The BRICS grouping of Brazil, Russia, India, China and South Africa is scheduled to meet on the sidelines of meetings of the World Bank and International Monetary Fund in Washington later this month.

Gopalan was tight-lipped when asked whether India would support a plan to buy European bonds to support the euro zone. "BRICS finance ministers will take a view on it," he said.

However, Pranab Mukherjee, India's finance minister, sounded sceptical on Tuesday about coordinated global policy action. Mukherjee said that unlike during the immediate aftermath of the global financial crisis of 2008, global policy coordination would be difficult now as different countries are at different stages of the economic cycle.

India has almost no exposure to Italian, Greek or Portuguese bonds, another finance ministry official who declined to be identified, told reporters yesterday, but he said India would be "cautious" in supporting a plan.

The exact makeup of India's central bank holdings of euro denominated assets is not in the public domain. No comment was immediately available from the Reserve Bank of India, India's central bank.