Sanya Declaration expresses concerns about over-appreciation of currencies

How this would be achieved is not yet clear as Trade & Industry Minister Rob Davies acknowledged that China had an ambition to use its currency unit, the renminbi, to become a reserve currency such as the euro and the US dollar.

Addressing the media in Pretoria on Sunday shortly after his return after the BRICS meeting in China last week, Davies said the countries had issued a joint declaration that articulated their position, and what they had in common.

Known as the Sanya Declaration, the declaration expressed concern about the over- appreciation of currencies, that, Davis said had been driven by loose policy by developed countries.

"This overvaluation of currencies stems from loose currency policies that have lowered interest rates in developed countries, causing short-term capital flows. This was a result of, what it seems, their only response to stimulating their economies,” Davies said.

Davies said that a study on how Brazil, Russia, India and China could improve their co-operation in trade and in multilateral organisation in general, such as climate change, International Monetary Fund reform, had begun, but it would now have to include South Africa.

"Part of this study is how we can become more effective as leading developing countries to represent the other developing countries in the international arena,” Davis said.

"This study”, he said, “is part of our ability and the kind of programmes we develop among ourselves, which is a real alternative to what we are confronting in the multilateral system.”