A China-based bank that's trying to de-dollarize global lending is now having trouble repaying its dollar debts, report says
A development bank established by the BRICS bloc of nations to reduce reliance on US dollar loans is having trouble finding dollars to repay its own debts,Based in Shanghai, the New Development Bank has largely ceased issuing new loans, the report said.
It was meant to establish an alternative to US-dominated, dollar-based financial institutions like the International Monetary Fund and dovetailed with Beijing's efforts to erode the greenback's status. Its lending was aggressive, and committed loans climbed from $1 billion in 2017 to $30 billion in 2022.
But after Russia's invasion of Ukraine last year, Wall Street backers were less willing to lend to a bank that was nearly 20% owned by Moscow. Without its usual dollar support, the institution is servicing prior debt through more expensive borrowings. According to the Journal, the bank's first bond since the Ukraine war started was five times as expensive as prior loans. Taken out in April, it cost $1.25 billion.
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