Top leaders from the BRICS nations are expected to announce the establishment of a new development bank at an upcoming summit in Durban, South Africa. The bank is aimed at counterbalancing the World Bank and similar Western-led organizations.

At present, the World Bank, the International Monetary Fund, the Asian Development Bank and other regional monetary organizations are all dominated by developed nations. The launch of the BRICS bank will mark the first time developing countries set up such an organization aimed at helping countries and regions with limited economic power.

The institution will also further reforms in the international monetary system. For example, the currency used by the bank for its operations will have a major impact on the global financial markets. If the yuan is chosen, this will greatly help with the internationalization of the yuan. Or the bank could be more flexible by using several currencies to promote mutual benefit.

The author is Zuo Xiaolei, chief economist at China Galaxy Securities.