IIC Approves A US$2,500,000 Participation In An Inter-American Development Bank Loan To The Currency Exchange Fund

02/21/2008

The IIC has worked with the IDB on a loan to The Currency Exchange Fund to promote private sector development by providing long-term financing in developing countries and transition economies.

Washington, D.C. (USA) - The Inter-American Investment Corporation (IIC) approved a participation in a subordinated IDB loan to The Currency Exchange Fund N.V. (TCX). This is the first cross-booked operation between the IIC and the IDB.

In January this year the Board of Executive Directors of the Inter-American Development Bank approved a subordinated loan of up to US$100 million to The Currency Exchange Fund N.V. The IIC will provide US$2.5 million of the total amount. TCX is a semi-open ended investment fund domiciled in the Netherlands and established under the sponsorship of the Netherlands bilateral aid agency FMO. The purpose of TCX is to promote economic development through the creation and/or strengthening of local-currency capital markets by taking the market risks associated with unhedged swaps (open market positions) where local markets do not exist or are for shorter maturities.

By participating in the IDB’s subordinated loan to TCX, the IIC seeks to use TCX's local-currency hedging services in countries with smaller economies where swap markets are limited or nonexistent. Thus, the IIC expects to broaden the range of local-currency funding it offers, which currently includes Colombian and Mexican pesos and Peruvian nuevos soles.

The Inter-American Investment Corporation is a multilateral financial institution that is a member of the Inter-American Development Bank (IDB) Group. It provides financing (in the form of equity investments, loans, guarantees, and other instruments) and advisory services to private enterprises in Latin America and the Caribbean. The IIC’s mission is to promote the economic development of its regional member countries by encouraging the establishment, expansion, and modernization of private enterprises, particularly those that are small and medium in size. For more information on the IIC’s activities, please visit www.iic.int

Contact: Michael Apel

Telephone: (202) 623-2521

Email: michaela@iadb.org