The Asian Development Bank (ADB) on Wednesday said it is planning to raise funds by issuing rupee denominated bonds. “We are looking at that... Offshore rupee bonds,” said Narhari Rao, officer in-charge ADB India resident mission, at an event here.
In 2004, the agency had raised funds by floating R400-crore onshore rupee denominated bonds.
Asked about the quantum of rupee bonds, he said, it is at a very initial stage. ADB is yet to take a call on when to issue and when to issue. The funds that would be raised are expected to go to private sector projects, Rao said.
Earlier this month, the World Bank group member International Finance Corporation (IFC) raised R1,000 crore ($160 million) in the US from its first offshore sale of rupee bonds. The three-year bond was offered and settled in dollar. The IFC will convert the proceeds into rupees in the domestic spot exchange market and use the money to finance private sector investments in the country.
The bonds carry a coupon of 7.75% and will be listed on the Luxembourg and Singapore exchanges.
The idea of such a bond was mooted when the rupee depreciated during the June-August period amid heightened worries the US would start tapering its $85-billion a month bond buying programme to stimulate the American economy. It was believed that the IFC offering would provide some relief to the rupee against the US dollar.