World Bank mulling local currency lending in countries like India: Official

The World Bank is mulling local currency lending in countries like India to help borrowers save on costs, a senior official said on Friday. “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,” Anshula Kant, the Managing Director and Chief Financial Officer of the World Bank, said.

Speaking at the event on global economy organised by the Ministry of Finance and the Reserve Bank of India (RBI) as part of India’s G-20 presidency, Kant said the Indian government has a “huge advantage” in local currency borrowing as compared to the World Bank, even though the Washington DC-based multilateral bank is rated AAA.

In some countries like the ones in Africa, which do not possess market infrastructure from where the bank can borrow, the bank may not adopt the local currency lending strategy, Kant said.

At the event, Chief Economic Advisor to the Government of India V Anantha Nageswaran said global inflationary pressures are easing more than expected.

He said persistence of core inflation globally continues to be a cause of concern and added that there is a need for coherence between fiscal and monetary policies.

Ashima Goyal, an academic who is also an external member on the monetary policy committee of RBI, said it is important for the monetary policy to address the financial stability needs.