NDB Dives into Local Currencies with Ambitious 30% Target by 2026

The New Development Bank (NDB) is shifting its strategy to ensure that 30% of its total portfolio is in local currencies by the end of 2026. This move aims to protect emerging economies from currency exchange volatility.

The NDB has historically relied heavily on the US dollar for most of its financial operations, but this transition marks a strategic pivot for the institution. By increasing lending in local currencies, the NDB aims to provide more stable financial support, allowing these countries to grow their infrastructure without constantly worrying about global currency fluctuations.

For India, this shift has a direct practical implication. The NDB is working to launch a program to issue bonds denominated in Indian Rupees, which will help deepen the domestic capital market by providing another high-quality investment avenue. The Pension Fund Regulatory and Development Authority (PFRDA) has already taken a step to support this, permitting Indian pension funds to invest in NDB rupee bonds.