International Finance Corporation (IFC), a member of the World Bank Group, on 7 October 2013 launched a 1 billion Dollars offshore bond programme to strengthen India’s capital markets and attract greater foreign investment.
Under the programme, IFC will issue rupee-linked bonds and use the proceeds to finance private sector investment in the country.
This 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.
IFC’s offshore bond programme will pave the way for an alternative source of funding for Indian companies.
What are the off shore rupee bonds ?
• These are bonds denominated in rupees but issued in international markets.
• Investor has to convert its currency into rupees before investing.
• The return and final redumption is also in rupees.
Why are such off shore bonds are important ?
• They are an important way of internationalising indian currency.
• It will improve acceptance of the Indian currency in setting trade.
• A deep market for local currency will help reduce dollar needs of the economy.
• The diversity fund raising options for Indian borrowers.
IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector in developing countries.
Established in 1956, IFC is owned by 184 member countries, a group that collectively determines its policies. IFC works in more than a 100 developing countries allows companies and financial institutions in emerging markets to create jobs, generate tax revenues, improve corporate governance and environmental performance, and contribute to their local communities.
IFC’s vision is that people should have the opportunity to escape poverty and improve their lives.
When: 7 October 2013