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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