Exchange rate and balance of payment risks in the global development finance architecture

Alfredo Schclarek () and Jiajun Xu

Working Paper from Agence française de développement

Abstract: The authors analyze the exchange rate and balance of payment crisis risks when MDBs lend, in hard currency, to NDBs, for NDBs to onlend to investment projects. Investment projects maybe “export-enhancing” (EXIPs), which generate hard currency (for example, building a port or developing export agriculture), or “domesticoriented” (DOIPs), which don’t generate hard currency (for example, a solar farm or a sewage system). If MDBs want to increase the proportion of onlending to DOIPs, they need to increase their refinancing to NDBs, and allow more time to pay back the loans. Further, MDBs need to reduce the interest rate charged on NDBs.This Research Paper is published in the framework of the International Research Initiative on Public Development Banks working groups and released for the occasion of the 14th AFD International Research Conference on Development. It is part of the pilot research program “Realizing the Potential of Public Development Banks for Achieving Sustainable Development Goals”. This program was launched, along with the International Research Initiative on Public Development Banks (PDBs), by the Institute of New Structural Economics (INSE) at Peking University, and sponsored by the Agence française de développement (AFD), Ford Foundation and International Development Finance Club (IDFC).Have a look on the key findings for a quick overview of the research resultsSee the video pitch

Keywords: Indonésie; Vietnam (search for similar items in EconPapers)
JEL-codes: Q (search for similar items in EconPapers)
Pages: 28
Date: 2020-11-02
References: View references in EconPapers View complete reference list from CitEc
Citations:

Published in Papiers de Recherche

Downloads: (external link)
https://www.afd.fr/sites/afd/files/2020-11-12-17-5 ... elopment-finance.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:avg:wpaper:fr11707

Access Statistics for this paper

More papers in Working Paper from Agence française de développement Contact information at EDIRC.
Bibliographic data for series maintained by AFD ().