TCX

Did you know that TCX provides a solution to currency risk not only for frontier countries, but also for emerging countries? In fact, we cover over 110 countries that are on the OECD-DAC list in (Central) Asia, Europe, Africa, Eastern Europe, Latin America and Oceania!   TCX offers hedging services when it complements (rather than competes with) the commercial market offering. We operate based on the principle of additionality and exist to address unserved demand for FX risk solutions.   In practice, this means that TCX is active in countries where derivatives markets are (relatively) shallow or absent, and where it can extend the tenors currently provided by commercial hedging providers.    #fxhedging #developmentfinance #emergingmarkets

The TCX team is proud toshare that we have been upgraded by Moody’s to Aa3, from A1, entering ‘AA’ territory. For us it shows that solving the challenge of currency risk in development finance can be done! And it can be done with a solid business and risk model. The Moody’s upgrade is based on the fund’s strong and growing shareholder base, as well as its strong growth whilst remaining profitable and maintaining robust capital and liquidity metrics. On the stable outlook Moody’s states: We expect interest from other DFIs and governments to support its pioneering work to remain strong, and TCX's aim to extend into providing local-currency financing solutions for sovereigns, climate finance and sustainable infrastructure is fully aligned with the interests of its shareholders and government sponsors. #developmentfinance #capitalmarkets #innovation Thanking our investors; FMO - Dutch entrepreneurial development bank, EBRD, KfW European Investment Bank (EIB) IFC - International Finance Corporation Oikocredit Agence Française de Développement Development Bank of Southern Africa (DBSA) BIO - the Belgian Investment Company for Developing Countries Proparco ASN Bank COFIDES @EMF BlueOrchard Finance Ltd Oxfam Novib Grameen Credit Agricole Foundation MFX Currency Risk Solutions Ministerie van Buitenlandse Zaken Federal Ministry for Economic Cooperation and Development (BMZ) SECO Economic Cooperation and Development Foreign, Commonwealth and Development Office. And special thanks to the European Commission.

How can we reduce high levels of #currency risk exposure in public debt books of developing countries?   Hedging FX risk is an important tool to protect public sector borrowers from currency volatility. It is available for larger volumes, long tenors, and even the most challenging markets.   TCX works with #developmentfinance lenders, the IMF, policy setters and borrowers to increase understanding, encourage appropriate risk management and build technical capacity.    6 colleagues give their views on mitigating FX risk in public debt books and increasing #debtsustainability — check it out below!   #sustainablefinance #debtmanagement #emergingmarkets Harald Hirschhofer Xander Goudriaan Sophie Peeters Jerome Pirouz Bert Van Lier Fizo Haddad

This week in Vienna, we joined our partner The OPEC Fund for International Development in celebrating the 25th anniversary of their private sector operations. OPEC Fund plays an important role in financing public and #privatesector development across more than 70 countries. As the fund marks this milestone, we look forward to our continued #partnership on mitigating FX risk and increasing indexed local #currency financing. Thanks to Esteban Chediak, Tulio Konstantinovitch, Oladipo Ajike and the other participants! #developmentfinance #developmentimpact

Since the beginning of 2024, the Ghanaian cedi depreciated with 20% against the US dollar. This means more cedi are needed to service Ghana's dollar-denominated debt.   The Health and Education at Risk (#HEAR) ratio shows what an increasing external debt burden may mean for government budgets.   We measure a HEAR ratio of -21 for Ghana. This implies that the country's USD-debt obligations amount to 21 times its average annual budgets for #health and #education.   In other words, ceteris paribus, another 10% depreciation of the cedi increases Ghana's debt burden with more than 2x its average budgets for health and education.   Reducing the level of unhedged USD debt would be an important step towards lowering the risk on fiscal budgets and improving #debtsustainability.   #fxrisk #resilience

When we finance emerging and frontier market governments our loans come with significant currency risks. It is an economic and moral obligation to explain these risks, as well as offer solutions to borrowers to manage them. #developmentfinance can do better.

We're bolstering economic growth in #Guatemala by supporting microentrepreneurs and SMEs through an FMO-led syndication for Fundación Génesis Empresarial: https://lnkd.in/e_AQuNPE While Guatemala is now an economically stable country, this development hasn't benefited the entire population. Génesis, a long-term client of FMO, is a beacon of hope in Guatemala's #microfinance landscape, with a client base of ~390,000--72% of which are women and 80% which reside in rural areas. A core part of their mission is their holistic "Development Route" concept, which combines loans with comprehensive technical assistance to address both business and life improvement needs of clients. To help bring sustainable economic development to the underserved Guatemalan population, we're supporting Génesis with two syndicated loans totaling USD 85 mln in local currency. The financing will not only support Génesis’ ambitions to grow microentrepreneurs’ businesses and their progress, but also promote life quality improvement. Many thanks to the other investors joining the consortium, which include BIO - the Belgian Investment Company for Developing Countries, Norfund, eco.business Fund, TCX, Invest in Visions, and Enabling Qapital AG. #ImpactInvesting #DevelopmentFinance

We are pleased to share that, as of last month, Marcus Fedder has taken on the role as Chair and Sarah Russell as Vice Chair of TCX’s Supervisory Board. Both have served as TCX Board Members for several years and have been instrumental in guiding the Fund on growing its impact in the #developmentfinance world. Marcus: "These are exciting times with local currency high on the development agenda. TCX is gearing up to meet increasing challenges as more and more borrowers realize that funding in local currency is key to managing important financial risks. I am delighted to work together with Sarah and the other Board members on this important journey." #currency #fxrisk #developmentimpact

Meet the TCX team! TCX is a growing institution. We are 40 professionals with diverse backgrounds, representing 25 countries globally. Together, we de-risk billions of #developmentfinance flows to emerging and frontier countries. #teamwork at its finest! #diversity #teambuilding #workforce Ruurd Brouwer Othman Boukrami Carien Dam Brice Ropion Bert Van Lier Sophie Peeters Sara Velco, CFA Thomas Oostheim

TCX offers its hedging products in more than 110 currencies and always tailors its activity in a market to the existing level of hedging availability. In markets with full onshore hedging availability, TCX role is mainly to provide access to hedging for clients that cannot access this otherwise. In markets with no currency risk hedging options, TCX's pricing is informed by macro fundamental research performed by OGResearch.   Check out the below case study and interview with Senior Economist Jiri Lukac to learn more about TCX's additionality in different markets and the value of our long-standing partnership with OGResearch.   #additionality #currencyrisk #partnershipforthegoals Áron Iker David Vavra Jos Kramer