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.
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