Almaty, Kazakhstan, August 31, 2011—IFC,
a member of the World Bank Group, signed an agreement with the National
Bank of Kazakhstan to expand IFC’s capacity to provide local currency
loans to companies operating in Kazakhstan and support growth of the country’s
private sector.
The swap agreement will allow IFC to
hedge its exchange rate and currency risks, increasing IFC's ability to
offer financing to businesses in local currency. Being able to borrow in
Kazakh Tenge is important for companies that do not generate foreign exchange
revenues and therefore face risks when borrowing in dollars or other international
currencies.
“We consider the Cross-Currency Swap
Agreement between the National Bank of Kazakhstan and IFC as a tool to
further develop the capital market in the country,” said Grigori Marchenko,
Governor of the National Bank of Kazakhstan. “It will open new long-term
sources of funding for local companies contributing to the sustainable
economic growth of the Republic of Kazakhstan.”
Shanker Krishnan, IFC Deputy Treasurer
and Head of Derivative Products, said, "Local currency financing is
critical for companies working in Kazakhstan’s non-extractive industries.
With support from the National Bank of Kazakhstan, IFC will be able to
offer its local clients long-term financing without burdening them with
exchange rate risks.”
IFC hopes to replicate this initiative in other Central Asian countries
that do not already have a swap market to facilitate local-currency lending.
As IFC’s largest client in Central Asia, Kazakhstan had received commitments
of close to $1.1 billion in IFC funds and almost $300 million in syndications
as of June 30, 2011. IFC's investments in Kazakhstan have been mainly in
the financial services, manufacturing and services sectors. Kazakhstan
became a member of IFC in 1993.
About IFC
IFC, a member of the World Bank Group,
is the largest global development institution focused exclusively on the
private sector. We help developing countries achieve sustainable growth
by financing investment, providing advisory services to businesses and
governments, and mobilizing capital in the international financial markets.
In fiscal 2011, amid economic uncertainty across the globe, we helped our
clients create jobs, strengthen environmental performance, and contribute
to their local communities—all while driving our investments to an all-time
high of nearly $19 billion. For more information, visit www.ifc.org
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