BRICS may set up credit rating agency soon

The Dollar Business Bureau

In a bid to challenge the dominance of west in the area of finance, the five-member association of emerging nations-BRICS is mulling to set up a credit rating agency.

The proposed agency for emerging markets is likely to be formed at the next BRICS summit, which will be hosted by India in October 2016.

 Since the past few years, the leaders of BRICS countries (Brazil, Russia, India, China and South Africa) were in talks to set up credit rating agency.

In an effort to make use of the disposal worth $100 billion in NDB, which was formed by BRICS, a proposal to set up NDB institute in India is underway. The proposal will be considered at the upcoming BRICS summit. The NDB institute’s function will be to research and determine the projects to utilize the amount stored in disposal of NDB.

Fitch, Moody’s, Standard & Poor, the three big credit rating agencies, account for 90 percent of the global ratings market.

The BRICS members claim that the western credit rating agencies are unfair and have a pessimistic view towards developing nations and an optimistic one towards developed countries.

Russia alleged that Ukraine crisis was the reason behind Moscow’s low ratings allotted by western agencies.

The BRICS rating agency will also rate infrastructure and sustainable projects of the emerging economies.