The BRICS’ (Brazil, Russia, India, China, and South Africa) New Development Bank intends to issue its first rupee bond in October, the latest stage in the global de-dollarization campaign.
Before the bloc’s annual summit in Johannesburg, the NDB confirmed that a rupee-denominated bond would be issued in October, one week after issuing a rand bond.
“We’re going to tap (the) Indian market – rupees – maybe by October in India,” Vladimir Kazbekov, the chief operating officer at the NDB, told a press briefing, according to Reuters.
“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),” he said.
It is unclear of the bond program’s target size.
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Chief Financial Officer Leslie Maasdorp told Reuters then that the bank aims to increase local currency lending, most of which has so far been in the Chinese yuan, from about 22% to 30% by 2026, but that there were limits to de-dollarisation.
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, Kazbekov said.
“The commitment is still there, but no projects. That’s why we are trying to find projects,” he said.
This comes soon after India announced that it settled its first crude oil payment in rupees instead of dollars in a transaction with the United Arab Emirates (UAE). The two economies plan to bolster trade in local currencies.
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