On Monday (21 August), the Chief Operating Officer of the New Development Bank (NDB) stated that the bank founded by the BRICS countries is aiming to issue its first Indian Rupee bond by October, as reported by Reuters.
Apparently, the COO of NDB Vladimir Kazbekov shared the bank’s plan while addressing a press briefing ahead of the BRICS Summit in Johannesburg which is currently underway and will continue till the 24th of August.
During his press briefing, he said, “We’re going to tap (the) Indian market – rupees – maybe by October in India.”
However, Kazbekov declined to give a target size for the Indian rupee bond program. Previously, media reports stated that the process for this decision was underway.
Going ahead, Kazbekov highlighted that NDB issued its first rand bond in South Africa last week and added that it could consider local currency issuance in members Brazil, Russia, and the United Arab Emirates.
He said, “Now we start thinking seriously… to use one member country’s currency to finance projects with that currency in another member. Let’s say, a project in South Africa to be financed in CNY (Chinese yuan), not with USD (U.S. dollar).”
Speaking with Reuters, Chief Financial Officer Leslie Maasdorp said that the bank aims to increase local currency lending, from about 22% to 30% by 2026, but that there were limits to de-dollarisation. Most of this lending has so far been in the Chinese yuan.
NDB was founded in 2015 and is hailed as one of the most concrete achievements of the BRICS countries – Brazil, Russia, India, China, and South Africa. The bloc is seen as a counterweight to the West. However, its lending process is comparatively slower which has hampered its plan.
The NDB has been working towards enhancing its ability to expand its raising and lending capabilities, with a particular focus on local currencies.
Kazbekov stated that the NDB is also ready to fulfill a commitment made two years ago to provide $3 billion of financing for South Africa’s “Just Transition” from mostly coal power to renewable energy. He added that the commitment is still there, but no projects. That’s why we are trying to find projects.
The 15th BRICS Summit is currently underway in Johannesburg, South Africa.
