In a move to facilitate investments in India and to ease pressure on the rupee, International Finance Corporation (IFC), the investment arm of the World Bank, has announced a $1 billion rupee bond issue in the offshore markets. The bond issue announced in Washington DC is the largest such issue in the offshore rupee market, a finance ministry statement said on Thursday. The move may boost demand for the rupee in offshore markets, give an international tag to the currency and have a favourable effect on the domestic exchange rate.
IFC has already raised local currency bonds in Chinese renminbi, Russian Ruble and Brazilian Real. The proposed IFC bond issue will finance private sector projects, including public-private partnerships. The issue will boost Indian markets and help attract more foreign investment, the release said quoting economic affairs secretary Arvind Mayaram.
Finance minister P Chidambaram is currently meeting top chief executives of Fortune 500 companies in the US to attract more foreign investments.
Vibrant domestic capital markets ensure access to long-term, local currency finance for the private sector, the release said quoting IFC?s CEO Jin-Yong Cai. He said IFC?s offshore bond programme will help bring depth and diversity to the offshore rupee market and pave the way for an alternative source of funding for Indian companies.
India accounted for $4.5 billion of IFC?s committed investment portfolio. In FY13, IFC invested $1.38 billion in India. It has provided over $10 billion in local-currency financing across 58 currencies.
