JAKARTA (TheInsiderStories) – The Asian Infrastructure Investment Bank (AIIB) offers an alternative financing on local currency for Indonesia, Thailand, Turkey, India and Russia, to avoid the volatile foreign exchange market, it said on Wednesday (07/17). It said, the launch of local currency financing will begin this month.
AIIB’ President Jin Liqun revealed the decision was born to meet the economic needs of the developing countries. The China-based bank said, frequently American President Donald Trump imposing financial sanctions on other countries and created a volatility in the market.
According to Chinese economists, the trade protectionism and financial hegemony of the Trump administration undermined the international reputation of the greenback. While, US’ Federal Reserve’ move to further cut interest rates will also weaken the position of the US dollar as the dominant international currency.
AIIB now has 100 approved members after its Board of Governors supported the applications of three African countries. The milestone was reached with the addition of Benin, Djibouti and Rwanda during the Bank’ annual meeting in Luxembourg on July 13.
“AIIB members collectively account for 78 percent of the world’s population and 63 percent of global GDP. With the backing of all of our members, we are building a lean, clean, and green institution that can help to support their sustainable development,“ said Liqun.
New estimates by the African Development Bank suggest that Africa’s infrastructure needs amount to $170 billion a year, with a financing gap in the range $108 billion. AIIB and the African Development Bank signed an agreement in April 2018 to enhance collaboration in developing programs, co-financing, and other forms of financial assistance, knowledge and staff exchanges.
AIIB was created by 57 founding members as a multilateral institution focused on supporting sustainable development through infrastructure. That another 43 members have joined in the last three years is recognition that AIIB has established itself as part of the rules-based international system, with strong governance and high international standards.
AIIB‘ inaugural projects ranged from a slum upgrading project in Indonesia to a new pipeline linking gas fields in Azerbaijan to markets in southern Europe, via Turkey. To date, 45 projects in 18 member countries totaling USD8.5 billion have been approved.
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