India (Commonwealth Union)_ According to the latest statement made by the Chief Operating Officer, the New Development Bank (NDB), an institution established by the BRICS nations, is currently strategizing to launch its inaugural Indian rupee bond by October. This move comes as the bank faces mounting pressure to amplify its efforts to secure and disburse funds denominated in local currencies. Last week, the NDB successfully issued its first rand bond in South Africa and is contemplating the possibility of similar local currency issuances in member states such as Brazil, Russia, and the United Arab Emirates.
Further, Vladimir Kazbekov, in a press briefing prior to the ongoing BRICS Summit in Johannesburg from August 22nd to 24th, mentioned that the bank is evaluating diverse avenues for currency-based financing within the organization’s membership. The inception of the NDB in 2015 stands as a substantial accomplishment within the framework of the BRICS countries, namely Brazil, Russia, India, China, and South Africa, as they strive to establish a countervailing influence against Western dominance. Notably, the NDB’s operational momentum has already been hindered by its sluggish lending pace and further exacerbated by the imposition of sanctions on Russia. The NDB is now directing its focus towards the Indian market, with Kazbekov affirming intentions to access rupee-denominated resources, potentially by October.
Kazbekov articulated a novel vision whereby the bank contemplates leveraging the currency of one member nation to financially back projects within another member nation. As an illustrative example, he suggested that a project situated in South Africa could be funded using the Chinese yuan (CNY) rather than the US dollar (USD). The fluidity of such a concept represents a departure from conventional lending practices and underscores the NDB’s evolving strategic direction. 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)”.
While Kazbekov refrained from specifying the precise magnitude of the Indian rupee bond initiative, prior reports from sources indicated that the framework for this program was already in the works. Previously, Leslie Maasdorp, the Chief Financial Officer, stated that the NDB aims to elevate its provision of localized currency loans, predominantly in Chinese yuan, from approximately 22% to 30% by the year 2026. However, this intention is bounded by the practical limitations of minimizing reliance on the US dollar.
In addition to these endeavors, the NDB remains steadfast in fulfilling a commitment made two years ago, pledging $3 billion in financial support for South Africa’s transition from coal-powered energy to renewable sources, known as the “Just Transition.” Kazbekov reaffirmed this commitment, noting that although the intention remains unwavering, the bank is actively in pursuit of suitable projects to align with this financial directive.
