Financial and investment flows to low-income countries present significant currency risks, which in turn inhibits finance and investments required to meaningfully narrow the SDG investment gap. Most debt investment is denominated in hard currency, exposing local borrowers and beneficiary countries to high currency risk and exposing investors to high credit risk. The majority of equity investment is denominated in local currency, exposing investors, who are interested in hard currency returns, to significant currency risk. The session will focus on experiences and solutions on innovative financing mechanisms reducing foreign currency risk and stimulating investment in developing countries.
