For First Time, AIIB to Begin Lending in the Local Currencies of Emerging Markets

On July 12, 2019, Asia Infrastructure Investment Bank President Jin Liqun announced that the bank would begin lending in the local currencies of select emerging markets, including Thailand, Indonesia, and India.  It would be the first time that a pledge to do so has been put into practice.  Ostensibly, the step is aimed at insulating debt taken on by recipients of AIIB from foreign exchange risk.  Under sustainable financing guidelines agreed to at the first Belt and Road Forum in 2017, the Chinese Ministry of Finance committed to encourage local currency lending.  To date, it has not followed through on that pledge.  The AIIB first said it would seek to implement local currency financing at a news conference in Beijing in January 2019.