World Bank Mulling Local Currency Lending For India, Says Official

The World Bank is reportedly considering the option of local currency lending in countries like India.

This move aims to help borrowers save on costs.

Anshula Kant, the managing director and chief financial officer of the World Bank, expressed the organisation's interest in exploring how local currency lending can be implemented in India.

"How do we do local currency lending for a country like India is also something we are trying to think of at a price which is advantageous to this country," Kant said, reports news agency PTI.

During a global economy event organised by the Ministry of Finance and the Reserve Bank of India (RBI), Kant highlighted the significant advantage that the Indian government has in local currency borrowing.

Despite the World Bank's AAA rating, Kant acknowledged that the Indian government is better positioned for local currency borrowing than the multilateral bank.

However, Kant also noted that the local currency lending strategy may not be applicable in countries like those in Africa, where market infrastructure for borrowing is not readily available for the bank.

Speaking at the event, chief economic advisor to the Government of India, V Anantha Nageswaran, highlighted at that global inflationary pressures are easing more than anticipated.

Nageswaran expressed concern about the persistence of core inflation worldwide and emphasised the need for coherence between fiscal and monetary policies.

Ashima Goyal, an academic and external member of the monetary policy committee of RBI, stressed the importance of addressing financial stability needs through monetary policy.