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‘Brics bank’ seeks move away from dollar funding

Published: August 7, 2019

The New Development Bank, a multilateral lender owned by Brazil, Russia, India, China and South Africa, is aiming to almost double its lending this year and shift its loan book away from the dollar to emphasize lending in local currencies, reported the Financial Times.

The Shanghai-headquartered NDB, or Brics bank as it is often known, has approved more than $9 billion in loans in its member countries after being founded four years ago. It is seen as a challenger to established lenders such as the World Bank, Asian Development Bank and IMF.

The bank plans to increase its loan book to $16 billion this year. So far it has mainly relied on its dollar paid-in capital for funding, but in the future “50% (of projects) should be local currency financed,” said the bank’s president K.V. Kamath in an interview.

Loans approved so far mainly cover transport, energy and water management projects, such as $620 million for the construction of an airport in northern China, $350 million for rural roads in India’s Bihar and $320 million for water sanitation projects on Russia’s Volga river.

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