IDB to expand contingent swap scheme in Latin America
New mechanism gives regional development banks cheaper FX rates with hedges linked to credit events
The Inter-American Development Bank (IDB) plans to expand a new programme enabling regional development banks to convert US dollar-denominated loans into local currency at a much cheaper rate via a novel cross-currency swap transaction.
A contingent cross-currency swap trade, the first of its kind to be executed by a multinational development bank, was completed in June to support a loan for the Banco Nacional de Desenvolvimento Econômico e Social (BNDES), one of the largest sovereign-owned
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