Cardano Development

Hedging currency risks in frontier markets

  • TCX provides medium to long-term (3-15 years) currency risk management products (cross-currency swaps) in 53 frontier market currencies
  • It was established by Cardano Development’s team in 2007. TCX is managed by a dedicated team of 17 professionals in Amsterdam
  • As at January 1, 2018, TCX manages a portfolio of USD 1.7 billion across 836 transactions in 53 emerging market currencies, in 5 regions globally. TCX is rated A- by S&P
  • TCX’s funding partners include 22 DFI/MIV investors (IFC, EBRD, KfW, EIB, FMO, AfDB and JBIC) and 3 official donor institutions (DGIS, BMZ, BMU)

TCX’s funding partners consist of development banks and microfinance organizations actively investing in long-term debt in frontier markets, where currency hedging solutions are non-existent or inadequate. TCX allows these investments to be made in local currency, thereby absorbing the currency risk that otherwise would be placed on to the MSME entrepreneurs and businesses at the end of the financing value chain.

TCX is an innovative fund driven by the ambition to reduce poverty levels by contributing to more resilient and inclusive development of financial systems in frontier economies. As stated in the 2015 Development Finance Forum, “local currency sources of finance are essential for private businesses and governments to avoid the risks associated with foreign currrency borrowing”.