The International Finance Corporation and Citigroup have launched a 1.6 billion rand facility to expand local currency financing in South Africa.
The deal aims to strengthen IFC’s capacity to provide rand-denominated funding to private-sector borrowers across South Africa economy-wide initiatives system.
It forms part of a broader push by development finance institutions to reduce currency mismatch risks in emerging markets economies globally.
Local currency borrowing helps firms earning domestic revenue avoid foreign-exchange risk in developing economies and regional markets worldwide significantly especially.
The facility has already supported IFC’s investment in Cape Water outcome-based bond issued by FirstRand Bank in South Africa market.
IFC vice president Jorge Familiar said local currency financing is vital amid increasing global economic volatility pressures worldwide.
He said firms earning local revenue struggle when borrowing in hard currency increasing financial vulnerability exposure risks market substantial systemic.
The arrangement builds on a similar Kenyan shilling facility signed between IFC and Citi in 2024 previous pilot model.
Familiar described the Kenya facility as a successful pilot now being replicated across other markets globally in practice rollout expanded.
IFC said it has committed more than 33 billion dollars in local currency financing across 71 currencies globally over past decade.