The Shanghai-based New Development Bank created by the BRICS bloc of emerging markets announced Wednesday that it had raised 1.5 billion rand ($94 million) at its first-ever South African bond auction.
According to South African government the proceeds will be used to fund infrastructure and sustainable development projects in South Africa, adding that the successful outcome sets the benchmark for future issuances.
The New Development Bank, a financial institution created by the BRICS bloc including Brazil, Russia, India, China, and South Africa, received more than 2.5 billion rand of bids for the three- and five-year bonds, enabling it to increase the size of the deal.
It allocated 71% to institutional investors and the rest to local banks in Tuesday’s sale, it said in a statement Wednesday.
According to auction results NDB’s two bonds, a 1 billion rand (U$52.3 million) five-year note and a 500 million rand three-year note, attracted 2.67 billion rand of bids in total.
Meanwhile, the Chief Financial Officer Leslie Maasdorp noted earlier that the bank aims to increase local currency lending, most of which has so far been in the Chinese yuan, from about 22% to 30% by 2026, but that there were limits to de-dollarisation.
The BRICS group will next week discuss deepening the use of local currencies in trade between member states at a summit in South Africa, the nation’s ambassador to the bloc said.
The talks will focus on issues including the establishment of a common payments system, while a technical committee is likely to be formed to start considering a potential joint currency, Anil Sooklal said on Monday.
There are no plans to discuss replacing the US dollar as the world’s de facto global currency, he said at a conference at the same venue.
