The BRICS countries Thursday signed two pacts on trade in their local currencies and agreed to set up a joint working group to study a development bank aimed at promoting economy in emerging and developing countries.

The agreement was signed as Indian Prime Minister Manmohan Singh, Chinese President Hu Jintao, Russian President Dmitry Medvedev, Brazilian President Dilma Rousseff and South African President Jacob Zuma concluded the 4 BRICS Summit in the Indian national capital.

A master agreement on extending credit facilities in the local currencies of the five countries and a BRICS multilateral letter of credit confirmation facility agreement were signed in the presence of the leaders of the BRICS countries at the Taj Palace Hotel.

The participating banks include the Export Import Bank of India, Banco Nacional de Desenvolimento Economico e Social (BNDES) of Brazil, State Corporation Bank for Development and Foreign Economic Affairs of Russia, China Development Bank and Development Bank of South Africa.

The master agreement would reduce dependence on hard and fully convertible currencies like the U.S. dollar and Japanese yen for transactions among BRICS nations and would help reduce transaction costs of intra-BRICS trade.

The confirmation facility pact envisages confirmation of lines of credit on receipt of a request from the exporter, the exporter's bank or the importer's bank. It could promote intra-BRICS trade.