Facilitating local capital market development through swap counterparty support

Nick K. Kolev and Jonathan Stilwell ()
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Jonathan Stilwell: FirstRand Group Treasury

Development Finance Agenda, 2025, vol. 10, issue 1, 14-15

Abstract: This article proposes a portfolio insurance approach to help Multilateral Development Banks (MDBs) and Development Finance Institutions (DFIs) manage currency risk. The approach facilitates warranted MDB/DFI local currency (LCY) lending and contributes to local capital market development. As they manage currency risk actively, MDBs and DFIs strengthen local financial institutions by enhancing their capabilities to deal with complex financial instruments. This capacity-building benefit gives our proposal extremely high development impact potential.

Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:afj:journ4:v:10:y:2025:i:1:p:14-15

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