Asia Development Bank To Issue Rupee Denominated Bonds

ADB president Masatsugu Asakawa said on Tuesday that the bank would look into issuing rupee-denominated bonds to raise funds.

Raising funds in local currency, he says, reduces forex volatility.

"We are encouraged to increase our local currency financing in order to avoid any kind of foreign exchange risk," he explained.

He added that the decision will be based on market conditions, demand, and supply.

Previously, the Asian Development Bank (ADB) raised funds in rupee-denominated bonds to finance projects in the country.

In January 2021, the ADB listed 10-year masala bonds, or Rupee-denominated bonds, worth Rs 300 crore on India INX, the international exchange located at International Financial Services Centre- Gift City in Gujarat.

Previously, the ADB raised Rs 850 crore (approximately $118 million) through a new issue of offshore Indian rupee-linked 10-year bonds.

This was ADB's first new maturity raised in Indian rupees since 2017 and adds to an established yield curve that spans from 2021 to 2030, with Rs 7,240 crore or $1 billion of outstanding bonds.

Aside from the Indian Rupee, ADB has raised funds through local currency bonds in the Georgian lari, Indonesian rupiah, Kazakhstan tenge, and Philippine peso.

Speaking to reporters at the start of the 56th Annual Meeting of the ADB's Board of Governors, he stated that the $25 billion investment in India over the next five years is subject to Board approval and has not yet been decided.

"That is my goal. However, India currently has the most needs in South Asia. "During our bilateral meetings, Prime Minister Narendra Modi stressed the importance of continuous infrastructure and renewable energy construction," he said.