IFC launches $ 1 billion offshore rupee bonds to strengthen India’s Capital Markets
International Finance Corporation (IFC) launched a $1 billion offshore bond programme to strengthen India’s capital markets and attract greater foreign investment. Under the programme, IFC will issue rupee-linked bonds and use the proceeds to finance private sector investment in the country.
How would offshore rupee bond programme help?
This programme would help bring depth and diversity to the offshore rupee market and provide an alternative source of funding for Indian companies. These bonds will be denominated in rupees but issued in international markets. An investor has to convert its currency into rupees before investing. The return and final redemption is also in rupees. The programme would help in internationalizing the Indian currency and will also improve acceptance of the Indian currency in setting trade. A thriving market for local currency will help reduce dollar needs of the economy.
About International Finance Corporation:
- Established in 1956 as an arm of the World Bank Group.
- It is an international financial institution which offers investment, advisory, and asset management services to encourage private sector development in developing countries.
- Aim: To create opportunities for people to escape poverty and achieve better living standards by mobilizing financial resources for private enterprise, promoting accessible and competitive markets, supporting businesses and other private sector entities, and creating jobs and delivering necessary services to those who are poverty-stricken or otherwise vulnerable.
- It is the largest global development institution focused exclusively on the private sector in developing countries.
- It is owned by 184 member countries, a group which together governs its policies.