Earlier this week, TCX provided a hedge in Sierra Leone for the first time, allowing a fund to offer its client a loan in leones (SLL). Through the hedge, a currency mismatch between the borrower’s funding and revenues has been avoided. This first deal had a tenor of two years and was directed toward the microfinance sector in the country.
Hedging in Sierra Leone is made possible on the back of a macroeconomic model for the country, developed by TCX and its research partner, OG Research. In the absence of a developed financial market, this model is an important input in the pricing of cross-currency swaps.
If you are interested in offering local currency loans in Sierra Leone, or if you have any questions or comments, please do not hesitate to contact us: [email protected]