The launching of a Indian rupee denominated bond by International Finance Corporation, a member of the World Bank group, is possibly the first step towards internationalisation of the Indian currency, top Indian and IFC officials have said.
"This is for the first time that a Indian rupee denominated bond is being launched in the global market," the Economic Secretary Arvind Mayaram told a group of Indian reporters yesterday after the International Finance Corporation -- a member of the World Bank Group -- announced to launch a USD 1 billion offshore rupee bond program which he described as a key step towards "process of internationalisation of Indian rupee bond market."
Mayaram said through this he expects that investors who have not yet come into India, to enter the Indian bond market.
"This would be one of the ways in which we can channelise global savings towards investing in India, especially the infrastructure sector," Mayaram said yesterday.
Echoing Mayaram, Jingdong Hua, International Finance Corporation vice president and treasurer described it as "internationalisation of rupee", which he has have not heard this before.
"I as the IFC treasurer, looking at India, China and the US as the top three economies by 203, would like to offer Indian rupee as a currency of IFC as routine as US dollar," he said.
The USD 1 billion offshore rupee bond program is largest of its kind in offshore rupee market.
Under the program International Finance Corporation will issue rupee-linked bonds and use the proceeds to finance private sector investment in the country.
"It is a major development, as far as we are concerned in providing long term assured finance in several areas including infrastructure which is now looking for financing," Mayaram said in response to a question.
The International Finance Corporation, he said, is raising the bond and would be providing long term loans to projects approved by it.
Mayaram hoped that once this effort is successful in raising USD 1 billion in rupees through the international market, the International Finance Corporation would follow it up with several other launches in the coming years.
"This is the first time that we are testing how global rupee bond issuance is accepted by the world. Once it is done, there is a possibility that other Indian finance companies, they could also possibly go into the global market to get finance.That is the future. We still need to see how the