TCX generates development impact by protecting the most vulnerable from financial volatility emanating from currency risk. This is achieved by offering currency risk hedging products to promote and facilitate lending denominated in local currencies. The Impact Report 2020 helps to measure and report this impact.

A newly introduced three-pillar framework allows to measure the different aspects of TCX’s impact by laying out the Fund’s role in efficient risk allocation and the promotion of local currency in development finance. The three interlinked pillars are the following:

Pillar 1: TCX’s core function of de-risking development finance with the Fund’s unique risk bearing capacity and ability to manage frontier currency risk.

Pillar 2: TCX’s contribution to market development. Since 2013, TCX has evolved from a long-only fund to actively selling part of its accumulated risk to international investors, thus contributing to offshore market development, and allowing for efficient risk allocation.

Pillar 3: TCX’s thought leadership in local currency finance. This includes advocating for sustainable finance and cooperating with various stakeholders to increase awareness and understanding of currency risk in development finance.

The Impact Report identifies and measures various impact indicators corresponding to each of the three pillars. Going forward, these indicators will be tracked and reported on a regular basis.

Please find a digital copy of the Impact Report 2020 here.