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00:00Early this week it was announced that a new development bank is being established by the BRICS Brazil Russia India and China and South Africa. Those nations to which each country will contribute. And we're going to end up with a total of one hundred billion dollars of financing. Joining us now from Jo'burg Johannesburg is the former governor of the South African Reserve Bank and a non-executive director of the New Development Bank. It is Tito Glennie Tito. Great to have you with me this morning on Bloomberg Television. OK. So you've got the capital . Ready almost to get to the point of activating this new development bank. When did the first disbursements common what kind of projects is the bank going to focus on . Well thank you very much indeed. The bank is barely a day old . It was lodged in Moscow during the course of the week. We hope that by the first quarter of next year it will be in business and beginning to provide development financing. Night again when I saw this news come through on the Bloomberg terminal and I thought well we've got the World Bank we've got the Asian Development Bank the Chinese are busy building their own war chest. Where does this bank fit in. Do we need. I suppose this is the question. Do we need another development bank. What's going to make this development bank stand out yes we do need another development bank but of a different kind . In fact we say that we want to move from what was called Best Practice into the new practice. In other words beginning to tackle development challenges differently from the way in which the IMF and the World Bank African Development Bank have tackled them. Probably yes we might work more along the lines of the development banks that you see in China and also in South Africa . But this is not a substitute for the World Bank or the Latin American development bank or any other developed financial institution. This is just an additional source of funding but it would do us to do things differently. And I think the founding countries these five countries which are also members of the World Bank Group have nevertheless found that a lot of problems with the World Bank Group and we want to try and take on the more riskier infrastructure projects for example and other development projects. But there may be cases where we have to work together. We should not be in competition but we should seek to tackle the big development challenges facing the developing countries. As you might want to say though one of those the biggest development challenges of course is right there on your own and your own beautiful. I've got us a beautiful backyard and it is about power. It is a huge issue for South Africa. So I suppose my question to you is here we are we've got a new and you do that in the bank that wants to take on riskier projects. It's a very pressing need. Will the New Development Bank act as a bridge kind of get involved potentially in funding at building the infrastructure in South Africa perhaps even getting involved in the nuclear energy plans . What's the possibility of that well I suspect that when the time comes and maybe s quorum is made the application the executive will consider this. I think it falls squarely within the mandate of the bank to provide such capital for these large projects but they'll also be smaller projects. I'm quite certain that promotes development. The key thing though is that this development bank has to pop at night in some instances with domestic development finance institutions for example in South Africa where the DB is a dubious is a perfect example of a potential partner for the Development Bank because the debate is that basically it's an infrastructure bank. You know the New Development Bank in southern Africa but also in other parts of Africa. Tito I'm gonna get your opinion on this obviously emerging market currencies let's just broaden the scope. You've got you've got Reserve Bank pedigree so you've got to have an opinion on that. Sure. Don't don't it. I've got the Fed potentially potentially moving emerging market currencies have been under pressure high South Africa high highs it preparing itself or is it in better shape nigh to deal with a Federal Reserve that may hike Well I think that the the macro economic fundamentals are still in place in South Africa and I think that's very important although there's a widening current account deficit I think it's within affordable levels. The inflation rate I think is fairly stable below 6 percent. The are on the wage side. It's not as much as one should expect . There's no supply and distort demand pressure on the economy at all so I would expect this Afghan economy to weather this storm fairly well. I expect the currency to find an appropriate level to settle but the quicker this Greek thing is sorted out the better for everybody. Because no matter how good our fundamentals may be. But if there's a disturbance somewhere in the world which is seen to affect major markets wherever we are always blamed as the emerging markets there's always what is called flight to quality. So even if there's no problem in South Africa people who always have rice out into the pound or the euro or the dollar that's life. So we have to live with that reality. Our responsibility is to make sure that we continue with prudent economic management. I think that's the key for us to tell. Fantastic to get your input today as you say that day. New Development Bank barely a day old and you chose Bloomberg to come and discuss it. Thank you so much for your time sir detail humble any joining us that format second on the Reserve Bank governor .

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BRICS Development Bank to Be Operational First Quarter

The BRICS New Development Bank, formed by five of the world’s bigger emerging markets, is aiming to be operational by the first quarter of next year, Tito Mboweni, a non-executive director of the lender and a former governor of South Africa’s central bank, said in an interview with Manus Cranny on Bloomberg’s "The Pulse." (Source: Bloomberg)

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