Through options embedded in the IBRD Flexible Loan borrowers have access to local currency at the time of disbursement or at any time during the life of the loan to reduce future vulnerabilities to foreign exchange risk.
In addition to major currencies, IBRD financing is available in a growing list of local currencies. Some of the ways clients can access local currency include:
- currency conversion options embedded in IBRD loans
- stand-alone currency hedging transactions
- local currency bonds tied to IBRD loans
Even in countries with evolving or non-existent local currency swap markets, we have found ways to offer local currency.
By matching the currency of assets and liabilities, clients can mitigate the impact of foreign exchange volatility on public budgets and development programs.