Tonga has authorised the Asian Development Bank (ADB) to issue bonds in Tongan paʻanga, both domestically and internationally.
The decision was formalised during the ADB’s 58th Annual Meeting in Milan, Italy, marking Tonga’s inaugural approval for local currency bond issuance by the ADB. Fiji, which initially sought similar approval in 2018, has also renewed its consent.
Annie Wang, ADB’s Assistant Treasurer, noted that Tonga responded swiftly and favourably to the request. “They gave us the greenlight and welcomed us to the market and allowed us to develop the market and develop the project in local currency,” she said.
Issuing bonds in local currency aims to bolster financial market development and reduce reliance on foreign exchange, thereby enhancing economic resilience. The funds raised will be channelled into development projects within Tonga, such as renewable energy, infrastructure, and small business support.
This move aligns with the G20’s call for multilateral development banks to increase local currency financing. As of October 2024, the ADB’s local currency portfolio exceeded USD$3.75 billion across more than 15 currencies.
The ADB will now conduct due diligence to assess market conditions before proceeding with bond issuance in Tonga.
