The New Development Bank of BRICS will issue the first Indian Rupee Bond, a measure that will strengthen the alliance.
According to a report by Reuter, the BRICS Bank, also known as the New Development Bank (NDB), is planning to issue its first Indian Rupee bond in October.
Additional Bond Issuance to Commence
Vladimir Kazbekov, vice president and chief operating officer of the BRICS Bank, announced the news as the lender is under pressure to raise and lend more in local currencies. He did not disclose the target size of the Indian Rupee bond initiative, which is notable.
“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 stated.
Last week, the bank issued its first South African rand bond, and the BRICS COO mentioned that the bloc is contemplating the issuance of local currencies in 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 is considered the bloc’s most tangible accomplishment.
It was created to facilitate resource mobilization for infrastructure and sustainable development initiatives in emerging markets and developing nations. The bank initiated the expansion of its membership two years ago.
BRICS Bank Membership Expands
Bangladesh, Egypt, the United Arab Emirates, and Uruguay joined the bank as new members. However, the sanctions imposed on Russia in response to its invasion of Ukraine slowed its sluggish lending activity.
Consequently, the bank began considering 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 action, the BRICS nations inch closer to their planned de-dollarization. Last week, India and the UAE consummated their first crude oil transaction. The transaction was conducted in Indian Rupees, displacing the U.S. dollar. This was India’s strategy to decrease its reliance on the U.S. currency.
The de-dollarization plan of BRICS has begun to bring the bloc into the limelight, as many countries have expressed interest in participating. In light of this, the BRICS nations have unanimously agreed to expand their group to include additional nations.
