The Inter-American Development Bank has begun to dip its toe into local-currency borrowing and lending over the past few months. Previously, the IDB could only borrow in Latin American currencies if it immediately swapped the proceeds into dollars; now it can also borrow in them if it immediately lends the proceeds to a specific project.
But IDB observers hold out hope for a much more aggressive use of the bank’s liabilities. A report from the Center for Global Development, whose authors include former IDB chief economist Ricardo Hausman and former Mexican finance minister Angel Gurria, says that the bank...
