BRICS NDB President Says BRICS Plans to Lend in South African and Brazilian Currencies

 

The New Development Bank (NDB), also known as the BRICS Development Bank, plans to lend in South African and Brazilian currencies to defy reliance on the US dollar.

In a recent interview with the Financial Times, Dilma Rousseff disclosed the following information. 

Brazil, Russia, India, China, and South Africa established the BRICS Bank in 2015.

She said the Shanghai-based lender was considering membership applications from about 15 countries and was likely to admit four or five.

SHE SAID the NDB is working on diversifying its geographic representation but declined to name the countries.

In an interview with the newspaper, Rousseff said, "We expect to lend between $8 billion and $10 billion this year."

"We aim to lend about 30% in local currency on everything we do."

As for the NDB, she said it would issue debt in rand for lending in South Africa and do the same in Brazil with the real. We will either try to do a currency swap or issue debt in rupees.

By lending in local currency, borrowers in member countries will avoid exchange rate risk and interest rate fluctuations in the US.

“Local currencies are not alternatives to the dollar,” she said.