Fiji and Tonga have made a significant step forward in their financial collaboration with the Asian Development Bank (ADB) by becoming the first Pacific developing member countries to approve the issuance of inshore and offshore bonds in their local currencies. This milestone was formally recognized at the ADB’s 58th Annual Meeting in Milan, Italy, where both nations submitted their regulatory approvals.
Annie Wang, the Assistant Treasurer at ADB, explained that Fiji initially sought this approval in 2018 to allow ADB to issue debt securities in Fijian dollars on the international market. Citing prior difficulties with demand and currency conversion logistics, the ADB decided that an onshore approach would be more feasible, increasing investor choice between government and ADB bonds that would specifically fund development projects within Fiji.
For Tonga, this marks its first request for local currency bonds, which was successfully processed with prompt regulatory approval allowing ADB to denominate bonds in Tongan Pa’anga for both onshore and offshore markets.
The ADB’s initiative aligns with a G20 call for increased local currency financing and reflects the bank’s longstanding commitment to supporting small and medium enterprises (SMEs) and fostering sustainable economic growth across the Pacific. The ADB has emphasized that funds raised will not be extracted from the local market, but rather invested back into development projects focusing on various sectors, including clean energy and health.
These efforts are part of the broader objective of ADB to scale local currency financing, thus reducing exposure to foreign exchange risks and supporting the financial stability of these nations. Wang noted that the ADB’s approach is informed by its 20 years of experience in issuing local currency bonds, with an expanded focus now on sovereign lending.
This initiative brings hope for bolstered economic resilience in Fiji and Tonga, providing an opportunity for sustainable investment and improved infrastructure, benefiting both countries and contributing positively to the region’s development landscape.
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