{"id":36770,"date":"2024-04-04T09:07:51","date_gmt":"2024-04-04T09:07:51","guid":{"rendered":"https:\/\/edukemy.com\/blog\/?p=36770"},"modified":"2024-04-04T09:07:52","modified_gmt":"2024-04-04T09:07:52","slug":"brics-contingent-reserve-arrangement-cra-upsc-economy-notes","status":"publish","type":"post","link":"https:\/\/edukemy.com\/blog\/brics-contingent-reserve-arrangement-cra-upsc-economy-notes\/","title":{"rendered":"BRICS Contingent Reserve Arrangement (CRA) &#8211; UPSC Economy Notes"},"content":{"rendered":"\n<figure class=\"wp-block-image size-full\"><a href=\"https:\/\/edukemy.com\/upsc\/upsc-economy?utm_source=Blog&amp;utm_medium=Banner&amp;utm_campaign=Blog+Economy\" target=\"_blank\" rel=\"noreferrer noopener\"><img fetchpriority=\"high\" decoding=\"async\" width=\"1280\" height=\"300\" src=\"https:\/\/edukemy.com\/blog\/wp-content\/uploads\/2024\/06\/17.png\" alt=\"\" class=\"wp-image-42386\" srcset=\"https:\/\/edukemy.com\/blog\/wp-content\/uploads\/2024\/06\/17.png 1280w, https:\/\/edukemy.com\/blog\/wp-content\/uploads\/2024\/06\/17-1170x274.png 1170w, https:\/\/edukemy.com\/blog\/wp-content\/uploads\/2024\/06\/17-585x137.png 585w\" sizes=\"(max-width: 1280px) 100vw, 1280px\" \/><\/a><\/figure>\n\n\n\n<p>The BRICS Contingent Reserve Arrangement (CRA) is a financial mechanism established by the BRICS countries (Brazil, Russia, India, China, and South Africa) to provide a pool of foreign currency reserves that member countries can draw upon in case of balance of payments (BoP) crises. The CRA was signed in 2014 at Fortaleza, Brazil, and became operational in 2016.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_73 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<label for=\"ez-toc-cssicon-toggle-item-69d63bd02e55e\" class=\"ez-toc-cssicon-toggle-label\"><p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-cssicon\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69d63bd02e55e\"  \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/edukemy.com\/blog\/brics-contingent-reserve-arrangement-cra-upsc-economy-notes\/#Key_Features\" title=\"Key Features:\">Key Features:<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/edukemy.com\/blog\/brics-contingent-reserve-arrangement-cra-upsc-economy-notes\/#FAQs\" title=\"FAQs\">FAQs<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/edukemy.com\/blog\/brics-contingent-reserve-arrangement-cra-upsc-economy-notes\/#1_What_is_the_BRICS_Contingent_Reserve_Arrangement_CRA\" title=\"1. What is the BRICS Contingent Reserve Arrangement (CRA)?\">1. What is the BRICS Contingent Reserve Arrangement (CRA)?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/edukemy.com\/blog\/brics-contingent-reserve-arrangement-cra-upsc-economy-notes\/#2_How_does_the_BRICS_CRA_work\" title=\"2. How does the BRICS CRA work?\">2. How does the BRICS CRA work?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/edukemy.com\/blog\/brics-contingent-reserve-arrangement-cra-upsc-economy-notes\/#3_What_are_the_benefits_of_the_BRICS_CRA\" title=\"3. What are the benefits of the BRICS CRA?\">3. What are the benefits of the BRICS CRA?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/edukemy.com\/blog\/brics-contingent-reserve-arrangement-cra-upsc-economy-notes\/#4_How_much_capital_has_been_committed_to_the_BRICS_CRA\" title=\"4. How much capital has been committed to the BRICS CRA?\">4. How much capital has been committed to the BRICS CRA?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/edukemy.com\/blog\/brics-contingent-reserve-arrangement-cra-upsc-economy-notes\/#5_Has_the_BRICS_CRA_been_utilized\" title=\"5. Has the BRICS CRA been utilized?\">5. Has the BRICS CRA been utilized?<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/edukemy.com\/blog\/brics-contingent-reserve-arrangement-cra-upsc-economy-notes\/#In_case_you_still_have_your_doubts_contact_us_on_9811333901\" title=\"In case you still have your doubts, contact us on 9811333901.&nbsp;\">In case you still have your doubts, contact us on 9811333901.&nbsp;<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/edukemy.com\/blog\/brics-contingent-reserve-arrangement-cra-upsc-economy-notes\/#Visit_our_YouTube_Channel_%E2%80%93_here\" title=\"Visit our YouTube Channel &#8211;&nbsp;here\">Visit our YouTube Channel &#8211;&nbsp;here<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Key_Features\"><\/span><strong>Key Features:<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ol class=\"wp-block-list\"><li><strong>Objective:<\/strong> The primary objective of the CRA is to offer a safeguard against global liquidity pressures, especially when the national currencies of member countries are adversely affected by global financial pressures. It serves as a financial safety net to address short-term BoP challenges.<\/li><li><strong>Members:<\/strong> The BRICS countries, namely Brazil, Russia, India, China, and South Africa, are the founding members of the CRA. Each member contributes to the pool, creating a collective reserve.<\/li><li><strong>Formation Year:<\/strong> The agreement to establish the CRA was signed in 2014 during the 6th BRICS Summit in Fortaleza, Brazil. The arrangement became operational in 2016.<\/li><li><strong>Capital and Contributions:<\/strong> The CRA has a total capital of $100 billion, with each member contributing a specific amount. The contributions are not equal, but the pool is created collectively.<\/li><li><strong>Purpose:<\/strong> The CRA is designed to provide financial support to member countries facing BoP problems. It acts as a supplement to the existing international monetary system and is seen as an example of south-south cooperation\u2014cooperation among developing nations.<\/li><li><strong>Complementarity with the IMF:<\/strong> While the CRA shares some similarities with the International Monetary Fund (IMF), it is considered complementary rather than a direct competitor. Member countries can still access IMF resources if needed, and the CRA works in coordination with the broader international financial architecture.<\/li><li><strong>Borrowing Limits:<\/strong> The terms of the CRA stipulate that each member country can only borrow a portion of its contribution before seeking a stand-by arrangement with the IMF. The borrowing limits under the CRA are relatively small compared to the resources available through the IMF.<\/li><\/ol>\n\n\n\n<p>The BRICS CRA reflects the collective commitment of its member countries to enhance financial cooperation and resilience, particularly in addressing short-term BoP challenges. It is part of broader efforts to reform the global financial architecture to better represent the interests of emerging and developing economies.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"FAQs\"><\/span>FAQs<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"1_What_is_the_BRICS_Contingent_Reserve_Arrangement_CRA\"><\/span><strong>1. What is the BRICS Contingent Reserve Arrangement (CRA)?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\"><li>The BRICS Contingent Reserve Arrangement (CRA) is a framework established by the BRICS countries (Brazil, Russia, India, China, and South Africa) to provide mutual financial support and assistance in times of financial crisis or instability. It acts as an alternative to the International Monetary Fund (IMF) for member countries facing balance of payments problems.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"2_How_does_the_BRICS_CRA_work\"><\/span><strong>2. How does the BRICS CRA work?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\"><li>Member countries contribute funds to the CRA, which are then pooled to create a reserve. In case of need, a BRICS member facing financial difficulties can access this reserve to stabilize its currency and address balance of payments issues. The CRA aims to enhance financial stability and promote cooperation among BRICS nations.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"3_What_are_the_benefits_of_the_BRICS_CRA\"><\/span><strong>3. What are the benefits of the BRICS CRA?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\"><li>The CRA provides several benefits to BRICS member countries. It reduces dependency on external financial institutions like the IMF, allowing member countries more autonomy in managing financial crises. It also fosters closer economic cooperation and solidarity among BRICS nations, enhancing their collective economic resilience.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"4_How_much_capital_has_been_committed_to_the_BRICS_CRA\"><\/span><strong>4. How much capital has been committed to the BRICS CRA?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\"><li>The initial total capital commitment to the CRA was set at $100 billion, with each BRICS member contributing an equal share. This capital pool serves as a financial buffer to support member countries during times of crisis. The amount of resources available for disbursement depends on the specific circumstances of each situation.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"5_Has_the_BRICS_CRA_been_utilized\"><\/span><strong>5. Has the BRICS CRA been utilized?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\"><li>As of the latest available information, the BRICS CRA has not been utilized since its establishment. However, its existence serves as a reassurance to member countries and the international financial community, demonstrating their commitment to financial stability and cooperation. The CRA stands ready to be activated should any member country require assistance in the future.<\/li><\/ul>\n\n\n\n<figure class=\"wp-block-image size-full is-resized\"><a href=\"https:\/\/edukemy.com\/upsc\/upsc-essay?utm_source=Blog&amp;utm_medium=Banner&amp;utm_campaign=Essay\" target=\"_blank\" rel=\"noreferrer noopener\"><img decoding=\"async\" data-src=\"https:\/\/edukemy.com\/blog\/wp-content\/uploads\/2024\/06\/UPSC-Essay-Course-1280\u00d7300-1-3.svg\" alt=\"\" class=\"wp-image-42688 lazyload\" width=\"781\" height=\"182\" src=\"data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==\" style=\"--smush-placeholder-width: 781px; --smush-placeholder-aspect-ratio: 781\/182;\" \/><\/a><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"block-c6ab63ae-7083-4831-b519-cb89dacafb18\"><span class=\"ez-toc-section\" id=\"In_case_you_still_have_your_doubts_contact_us_on_9811333901\"><\/span><strong>In case you still have your doubts, contact us on 9811333901.<\/strong>&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p id=\"block-52c5a91b-6ed6-46e3-b781-7cc0c63a0b76\">For UPSC Prelims Resources,&nbsp;<a href=\"https:\/\/edukemy.com\/upsc-cse-prelims-resource-centre\" target=\"_blank\" rel=\"noreferrer noopener\">Click here<\/a><\/p>\n\n\n\n<p id=\"block-d014fe86-d628-49d8-82ce-6c60dc6e7a73\">For Daily Updates and Study Material:<\/p>\n\n\n\n<p id=\"block-38177954-e668-4d8d-b250-d0fbd5a09390\">Join our Telegram Channel &#8211;&nbsp;<a href=\"https:\/\/t.me\/WithEdukemy4IAS\" target=\"_blank\" rel=\"noreferrer noopener\">Edukemy for IAS<\/a><\/p>\n\n\n\n<ul class=\"wp-block-list\" id=\"block-49ca2fe3-109f-4a88-b72e-9df49c3d328e\"><li>1. 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Mains Answer Writing Practice &#8211;&nbsp;<a href=\"https:\/\/bit.ly\/3mZuVxl\" target=\"_blank\" rel=\"noreferrer noopener\">here<\/a><\/li><\/ul>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"block-43ccddc1-5348-445f-ab6b-7baaf29fe58d\"><span class=\"ez-toc-section\" id=\"Visit_our_YouTube_Channel_%E2%80%93_here\"><\/span>Visit our YouTube Channel &#8211;&nbsp;<a href=\"https:\/\/www.youtube.com\/@EduKemyforIAS\" target=\"_blank\" rel=\"noreferrer noopener\">here<\/a><span class=\"ez-toc-section-end\"><\/span><\/h4>\n","protected":false},"excerpt":{"rendered":"<p>The BRICS Contingent Reserve Arrangement (CRA) is a financial mechanism established by the BRICS countries (Brazil, Russia, India, China, and South Africa)<\/p>\n","protected":false},"author":17,"featured_media":36771,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_eb_attr":"","om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_uf_show_specific_survey":0,"_uf_disable_surveys":false,"_lmt_disableupdate":"","_lmt_disable":"","footnotes":""},"categories":[209],"tags":[2986,2985,235,232,213,140],"class_list":["post-36770","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economy-notes","tag-brics","tag-brics-contingent-reserve-arrangement","tag-economy-notes","tag-upsc","tag-upsc-notes","tag-upsc_preparation_strategy"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/edukemy.com\/blog\/wp-json\/wp\/v2\/posts\/36770","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/edukemy.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/edukemy.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/edukemy.com\/blog\/wp-json\/wp\/v2\/users\/17"}],"replies":[{"embeddable":true,"href":"https:\/\/edukemy.com\/blog\/wp-json\/wp\/v2\/comments?post=36770"}],"version-history":[{"count":1,"href":"https:\/\/edukemy.com\/blog\/wp-json\/wp\/v2\/posts\/36770\/revisions"}],"predecessor-version":[{"id":36772,"href":"https:\/\/edukemy.com\/blog\/wp-json\/wp\/v2\/posts\/36770\/revisions\/36772"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/edukemy.com\/blog\/wp-json\/wp\/v2\/media\/36771"}],"wp:attachment":[{"href":"https:\/\/edukemy.com\/blog\/wp-json\/wp\/v2\/media?parent=36770"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/edukemy.com\/blog\/wp-json\/wp\/v2\/categories?post=36770"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/edukemy.com\/blog\/wp-json\/wp\/v2\/tags?post=36770"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}