In order to reduce reliance on the US dollar, the New Development Bank (NDB), Popularly known as the BRICS Development Bank, has revealed it plans to begin lending in South African and Brazilian currencies.
She also said the Shanghai-based lender was considering applications for membership from about 15 countries and was likely to approve the admission of four or five.
The bank’s president, Dilma Rousseff, disclosed this in a recent interview with Financial Times.
She refused to name the countries but said it was a priority for the NDB to diversify its geographic representation.
“We expect to lend between $8bn-$10bn this year.
“Our aim is to reach about 30 per cent of everything we lend in local currency,” she said.
She said the NDB would issue debt in rand for lending in South Africa and do “the same thing in Brazil with the real. We’re going to try to either do a currency swap or issue debt. And also in rupees.”
She added that lending in local currency would allow borrowers in member countries to avoid exchange rate risk and variations in US interest rates.
“Local currencies are not alternatives to the dollar.
“They’re alternatives to a system. So far the system has been unipolar , it’s going to be substituted by a more multipolar system,” she added.
She said the bank has also tried to distinguish itself from the World Bank and the International Monetary Fund (IMF) by not setting lists of political conditions on loans.
The multilateral development bank was established in 2015 by the BRICS nations (Brazil, Russia, India, China and South Africa).
Vice President Kashim Shettima is currently representing President Bola Tinubu at the 15th BRICS summit in South Africa.
Nigeria is not a member of the BRICS club.