The BRICS New Development Bank (NDB) needs to increase its fundraising and lending in local currencies in the face of the impact of sanctions against one of the group's shareholders, Russia, South Africa's Finance Minister Enoch Godongwana told the media.
As Johannesburg prepares to host next week's summit of the economic alliance that unites some of the world's emerging economies – Brazil, Russia, India, China and South Africa – the issue of lending in local currencies will also be on the agenda, as will the desire to reduce the risks of the impact of exchange rate fluctuations rather than de-dollarization, the South African official said.
"Most countries that are members of the NDB have been encouraging [it] to provide loans in local currencies," Godongwana said. "[It is] not doing as much as member countries require, but that is the strategic direction we are pushing the bank [in]."
Perspectives
Meanwhile, NDB Vice President and Chief Financial Officer Leslie Maasdorp told the media that the bank aims to increase local currency lending from about 22% to 30% by the year 2026, noting that there are limits to de-dollarization.
"The bank's operating currency is dollars for a very specific reason, US dollars are where the largest pools of liquidity are," Maasdorp said.
The NDB senior official added that the bank is listening to its shareholders and will decide on the currency mix to be used, in accordance with their wishes.