WASHINGTON, Oct 6: The World Bank will start a $5 billion fund to invest in local-currency denominated bonds in poor nations.

A report in the Wall Street Journal said the fund’s goal is to increase investment by western pension funds and Asian nations with bulging reserves in countries in that are considered relatively risky bets.

The Bank also hopes to boost the ability of poor nations to borrow in their own currencies rather than in dollars or euros.

That would help reduce the risks developing nations face when there are large swings in the value of rich-nation currencies.

Under the plan,the fund would invest in local-currency denominated bonds, with a minimum value of $200 million, issued by poor countries.

The bank plans to start with 15 to 20 countries, including some that already get a substantial foreign investment. They include Brazil, Chile, Egypt, the Philippines and Turkey. But if the project works the bank would invest in bonds by riskier governments. — APP