Asian Development Bank (ADB) President Masatsugu Asakawa on Tuesday said the bank will investigate the feasibility of issuing bonds denominated in Indian Rupee. He stated that, by raising funds in local currency, volatility due to fluctuating exchange rates could be reduced. The decision to issue such bonds will depend on the market conditions and the demand and supply of Rupee.
ADB had previously issued Rupee denominated bonds worth Rs 300 crore on India INX, the global securities market platform based in Gujarat’s International Financial Services Centre. Additionally, the Bank had released 10-year masala bonds worth Rs 850 crore, which constituted its longest ever outstanding bonds in Indian Rupees and enhanced other local currency bonds including Georgian Lari, Indonesian Rupiah, Kazakhstani Tenge and Philippine Peso.
Asakawa said that he had discussed the possibility of investing 25 billion US dollars into India over the next five years with Prime Minister Narendra Modi during their bilateral talks. The target is to stimulate rapid, inclusive, and sustainable growth that would benefit neighbouring countries such as Sri Lanka and Pakistan which had been facing food and energy crises.
ADB had revised its forecasting of India’s GDP growth for the FY2023 to 6.4 percent as compared to its initial prediction of 7 percent; whereas it expects the growth in FY 2024 to be 6.7 percent, depending on private investment and the industrial sector. India has urged for increased investments from multilateral funding agencies into sectors such as clean energy, infrastructure and climate financing in order to trigger monetary inclusion.
The IF-CAP (Innovative Finance Facility for Climate in Asia and the Pacific), a newly launched climate finance program also discussed by Asakawa at the start of the 56th ADB annual meeting, is being supported by partner nations Denmark, Japan, South Korea, Sweden, UK and the US. It plans to offer USD 3 billion in guarantees while expecting to create up to USD 15 billion worth of loan opportunities for financing climate-related projects.
About Asian Development Bank (ADB)
The Asian Development Bank is a multilateral organization that was founded in 1966 with the main objective of promoting economic development and social progress in the secor of Asia and the Pacific. The ADB has committed over $233 billion of loans and grants to its developing member countries throughout its history. Its headquarters are located in Manila, Philippines and its board members are elected by its 67 member countries. The ADB strives to reduce poverty and foster prosperity in the region by providing loans and grants for infrastructure, health care, education and economic development projects. Among its many projects are ones related to energy, urban development and environmental protection.
