The Asian Development Bank (ADB) is considering the possibility of issuing rupee-denominated bonds in India to allow the bank to raise funds in the local currency.
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Recent reports suggest that the Asian Development Bank (ADB) is contemplating the option of issuing bonds denominated in the Indian rupee. The primary objective behind this move is to enable the bank to raise funds in the local currency and subsequently minimize its currency risk while potentially reducing the borrowing cost.
Responding to the questions, President Masatsugu Asakawa said that if market circumstances and demand for the bond continue, the Asian Development Bank may consider the Masla Bond (Rupee-denominated bonds). According to him, the bank plans to raise more bonds in local currency to lessen the exchange risk for countries like India.
He said, “We are encouraged to increase our local currency financing for the countries to avoid the impact of foreign exchange risks. As long as market conditions are pertinent and demand is there, we would very much like to increase local financing.”
He also mentioned at the start of the annual meeting of ADB’s Board of Governors, that a $25 billion investment in India over the following five years is still up for approval.
The ADB launched 300 crores worth of 10-year masala bonds (rupee-denominated bonds) in January 2021 on the global securities market platform of India INX, the global exchange house of Gujrat’s International Financial Service Centre.
In response to another query regarding the South Asian market and its growth prospects, he replied that the Indian economy’s expansion will be advantageous for the entire South Asian region, including nations like Pakistan and Sri Lanka, which are each experiencing their own food and energy difficulties.
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