The BRICS - Brazil, Russia, India, China and South Africa - officially grouped together in 2009 due to similar political and economic situations, have had a roller-coaster ride this week after reports such as mixed Chinese data, comments made by Russian President Putin, the ongoing discussion on the Brazilian President's impeachment and the weak South African rand hit news wires.
The five-nation group had been dealing with similar economic problems when grouped together, but their situations have changed over the years. They continue to remain a significant economic force, especially after a BRICS bank was set up last year. The New Development Bank (NDB) established by the BRICS group, recently approved the issuance of five-year bonds in Chinese yuan, Interfax reported. The bank, established last year, is expected to raise funds on the Chinese market for now, while it waits for approval to tap into international markets.
But with uncertainty around oil prices and global growth surrounding emerging economies, it could be a rough ride ahead. Earlier this week, the IMF cut global forecasts and warned emerging markets of economic headwinds as their currencies could weaken further. Falling oil and commodity prices have already cut deep through a number of emerging nations, for instance Brazil and Russia. But ongoing political chaos in Brazil is further weighing on the country's economy.
The country's Supreme Court has rejected a request from the government to avert the impeachment process against President Dilma Rouseff. The impeachment proceedings are based on allegations that she violated federal budget by using loans from state-owned banks to mask the size of the government's budget deficit, Reuters reported.
The Brazilian real rallied on the news of impeachment, amid hopes that a change in government will bring investor-friendly policies for the economy. The IMF's latest report sees Brazil's recession deepening and the economy shrinking by half a percent in 2016.