BRICS New Development Bank: Five New Sovereign Investors Expected
New members expected to include Asian nations as BRICS policy bank expands
The BRICS New Development Bank (NDB) is currently considering applications for membership from nearly 15 countries, head of the multinational lender Dilma Rousseff said yesterday (August 22).
Rousseff, a former Brazilian president who currently heads the Shanghai-based lender, said it’s likely to accept and approve the admission of four or five new members, but declined to identify the countries. According to her, the NDB currently sees diversification of its geographic representation as one of its top priorities.
“We expect to have lent between US$8 billion and US$10 billion this year” she said, “Our aim is to reach about 30% of everything we lend in local currencies.”
She added that the NDB is planning to start lending in the South African and Brazilian currencies in an attempt to further reduce reliance on the US dollar, as the lender actively promotes a more multipolar international financial system. The bank ceased structuring loans in USD and Euros in 2021.
The NDB has already issued debt in Rand for lending in South Africa and will do “the same thing in Brazil with the Real. We’re going to try to either do a currency swap or issue debt and also in Rupees” she said, adding that the bank already lends in Renminbi.
The BRICS group comprising Brazil, Russia, India, China, and South Africa launched the NDB back in 2014 with the aim of providing funding for infrastructure and sustainable development projects. The bank formally opened for business in 2015, and Bangladesh, the United Arab Emirates, Egypt, and Uruguay are all now NBD shareholders and contributors.
Chris Devonshire-Ellis, of Dezan Shira & Associates states that “Likely new investors into the NBD could include Saudi Arabia and the UAE, which would give the NDB access to the Middle East region. Indonesia is a likely candidate from ASEAN, while Kazakhstan would give a Central Asian base. Argentina needs an alternative to non-Western financial support and would be another key asset in Latin America; and has been promised a succession vote at the current summit. Algeria and Thailand are also both potential candidates.”
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