The New Development Bank (NDB) is currently reviewing applications for membership from approximately 15 countries, according to Dilma Rousseff, the head of the multinational lender in an interview with the Financial Times. While Rousseff did not disclose the names of the countries, she mentioned that it is likely that four or five new members will be admitted.
The NDB, also known as the BRICS bank, is prioritizing diversification of its geographic representation. Rousseff stated, “Our aim is to reach about 30% of everything we lend… in local currency.” This year, the bank plans to lend between $8 billion and $10 billion, with a focus on lending in local currencies to reduce reliance on the US dollar.
To achieve this, the NDB intends to start lending in the South African rand and Brazilian real. Rousseff mentioned that the bank will explore options such as currency swaps or issuing debt in these currencies. The NDB already lends in renminbi, the Chinese currency.
The NDB was established in 2014 by the BRICS group, which includes Brazil, Russia, India, China, and South Africa. Its primary objective is to provide funding for infrastructure and sustainable development projects. The bank commenced operations in 2015 and has since been joined by Bangladesh, the United Arab Emirates, Egypt, and Uruguay as members. The NDB was created as an alternative to US-dominated financial institutions like the International Monetary Fund (IMF) and World Bank.
The NDB’s move towards lending in local currencies aligns with its goal of promoting a more multipolar international financial system. The bank aims to reduce reliance on the US dollar and create a more diversified financial landscape.
In line with this objective, Rousseff emphasized the need for a more multipolar international financial system. She stated that the NDB wants to contribute to the development of a financial system that allows for a greater distribution of power among nations. This vision underscores the NDB’s commitment to challenging the dominance of Western financial institutions and promoting a more inclusive global economic order.
The NDB’s decision to consider membership from additional countries demonstrates its growing influence and reach. By expanding its membership, the bank can increase its capacity to finance projects in various regions, further advancing its mission of supporting sustainable development and infrastructure initiatives.
As the NDB continues to gain momentum, its efforts to diversify its membership and lending portfolio will likely contribute to the establishment of a more balanced and resilient global financial system. In this regard, the NDB’s pursuit of lending in local currencies reflects a broader trend towards reducing the dominance of the US dollar and promoting economic independence among emerging economies.
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