The New Development Bank of BRICS bank is set to issue the first Indian Rupee Bond, a move that will strengthen the alliance By Godfrey Benjamin 7 hours ago Updated 7 hours ago
According to Reuter’s report, BRICS Bank also known as the New Development Bank (NDB) is making plans to issue its first Indian Rupee Bond by October.
More Bond Issuance to go Live
The news was announced by BRICS’ Bank’s Vice President and Chief Operating Officer Vladimir Kazbekov as the lender is being pressured to raise and lend more in local currencies. Markedly, he did not disclose the target size of the Indian Rupee bond project.
“NDB is seeking to increase its presence in the local capital markets of its member countries, to fund its robust portfolio of local currency loans,” Kazbekov said
Already, the bank issued its first South African rand bond last week and during that time, the BRICS COO mentioned that the bloc is considering the issuance of local currencies in other member countries Brazil, Russia, and the United Arab Emirates.
The NDB is a multilateral development bank established in 2015 by member nations (Brazil, Russia, India, China, and South Africa) and it is regarded as the most concrete achievement of the bloc. It was established for easy mobilization of resources for infrastructure and sustainable development projects in emerging markets and developing countries. Two years ago, the bank initiated the expansion of its membership.
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BRICS Bank Expands Membership
The bank took in Bangladesh, Egypt, United Arab Emirates, and Uruguay as its new member countries. However, its previously slow-paced lending was further impacted by the sanctions imposed on Russia following its invasion of Ukraine.
Therefore, the bank started thinking of using “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).”
With this move, the BRICS nations are inching closer towards de-dollarization as planned. Last week, India finalized its first crude oil transaction with the UAE. The transaction was completed with the Rupee, thereby, sidelining the US dollar. This was a strategy for India to reduce its reliance on the United States dollar.
The de-dollarization scheme of BRICS has started to put the bloc in the spotlight as many other nations have indicated interest in joining. Consequently, the BRICS nations have unanimously agreed to expand their group to accommodate other countries.