The Currency Exchange Fund (TCX), provides currency derivatives to hedge exchange rate risk in developing markets. TCX is a development finance initiative and its mandate is to complement the offering by commercial banks, which in many currencies is either absent, of insufficient depth or not accessible to all parties in need of currency protection. The fund’s shareholders include several donor countries and a wide range of development finance institutions and impact lenders. TCX started operations in 2007 and has since hedge currency exposures in excess of USD6 billion (as of 2018) in more than sixty developing markets worldwide.
TCX in the off-grid sector: the TCX mandate in the off-grid sector is to promote the deployment of sustainable - currency-risk free - local currency finance and to offer the hedging products required for that. To that end the fund i) offers education, training and technical assistance programs to build awareness of currency risk and to develop know-how and capacity around hedging products and hedging strategies and ii) provides hedging instruments to off-grid lenders, and in exceptional circumstance to off-grid borrowers, to facilitate lending in local currency in all currencies and in all tenors.