The Currency Exchange Fund n.v.

Equity : September 2007

BIO has invested USD 10 M in equity in the Currency Exchange Fund (TCX), a fund managing currency risk all over the world.

Amount

€ 7,091,000.00

Type of investment

Equity

Development impacts

Local economic growth

Beneficiary locations

Asia: Bangladesh, Cambodia, India, Indonesia, Myanmar, Nepal, Pakistan, Philippines, Sri Lanka, Vietnam

Latin America and Caribbean: Bolivia, Brazil, Colombia, Dominican Republic, Ecuador, El Salvador, Guatemala, Honduras, Nicaragua, Paraguay, Peru

Middle East & North Africa: Algeria, Egypt, Iraq, Jordan, Lebanon, Morocco, Syria, Tunisia, Palestinian Territories

Sub-Saharan Africa: Benin, Burkina Faso, Burundi, Cameroon, Côte d'Ivoire, Democratic Republic of Congo, Ethiopia, Ghana, Guinea, Kenya, Madagascar, Malawi, Mali, Mozambique, Niger, Nigeria, Rwanda, Senegal, South Africa, Tanzania, Uganda, Zambia

Investment field

Financial Institutions

Activity

Currency hedging

Organisation

The Currency Exchange Fund n.v.

Website

https://www.tcxfund.com/

Domicile

Netherlands

TCX was founded in 2007 by a group of development finance institutions (DFIs), specialized Microfinance Investment Vehicles (MIVs) and donors to offer a solution to currency risk, a solution which – until then – did not exist. The current investors in TCX are 22 multilateral and bilateral development finance institutions (DFIs) and microfinance investment vehicles (MIVs), and the Dutch and German governments.

TCX focuses on providing currency solutions for its investors. These have accounted for over 90% of the volumes transacted by TCX to date. The remainder is primarily provided through commercial banks to make local currency finance available to their borrowing clients in developing countries.

TCX operates on the basis of the following principles:

additionality: provide solutions where markets are thin or inexistent;
risk-reflective pricing: price in accordance with prevailing market rates and methodologies;
non-speculation: only hedge actual underlying exposure to the real economy.

Development impacts

Local economic growth
TCX cooperates as much as possible with local central banks to develop the education of the market players together with the use of best practices. This financial shift is expected to improve the viability of the productive sector, and more particularly the local SME.