Current Affairs - Finance

The European Central Bank (ECB) has introduced the digital euro as a central bank digital currency (CBDC) to modernize Europe's payment landscape. The digital euro enables direct peer-to-peer transactions, reduces transaction costs, and maintains anonymity similar to cash. As a digital version of cash, it is issued directly by the ECB and aims to strengthen Europe's digital sovereignty against global competitors. Unlike cryptocurrencies, CBDCs like the digital euro are legal tender, issued and backed by a central bank, providing a secure and regulated digital payment solution.

The World Bank has enhanced its lending capacity to support global development, prioritizing climate action and Sustainable Development Goals. With a strong focus on green projects, the organization aims to provide USD 150 billion over the next decade. As one of the World Bank's largest clients, India will receive a significant share of this funding for initiatives in climate resilience, rural development, energy, healthcare, and digital education. The World Bank's mission is to reduce poverty and promote shared prosperity through financial products, technical assistance, and policy advice.

The Asian Development Bank (ADB) has significantly enhanced its climate lending capabilities by $7.2 billion, thanks to guarantees from the United States ($1 billion) and Japan ($600 million) on existing loans. This increased financial capacity enables ADB to support critical climate-related projects, such as a $90 million sustainable aviation fuel initiative in Pakistan, which is half-funded by the ADB. The guarantees provide financial flexibility and underscore the vital role of Multilateral Development Banks (MDBs) in scaling up climate finance, particularly in the lead-up to COP29. This move demonstrates ADB's commitment to addressing climate change and promoting sustainable development.

The World Bank's approval of a ₹13,500 crore loan for Amaravati's development signifies a significant investment in India's urban infrastructure. The "Amaravati Inclusive and Sustainable Capital City Development Program" aims to create a modern, sustainable, and inclusive city. This collaboration between the World Bank, Asian Development Bank, Union Finance Ministry, and Andhra Pradesh Capital Region Development Authority underscores the importance of international partnerships in driving economic growth and urban development in India. The loan will support critical infrastructure development, enhancing the quality of life for Amaravati's residents.

The Asian Development Bank (ADB) has sanctioned a $200 million loan to improve urban infrastructure in Uttarakhand. The project aims to enhance water supply, sanitation, urban mobility, drainage, and flood management in Haldwani, as well as upgrade water supply delivery in four other cities. This loan demonstrates ADB's commitment to supporting India's urban development goals, focusing on sustainable and inclusive growth. The project will benefit residents and businesses in Uttarakhand by promoting better living standards and economic opportunities. ADB's funding will play a crucial role in transforming the state's urban landscape.