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Practitioners’ Guides to FX Hedging

The following guides are designed to explain fx hedging products. The content is intended for an audience that is new to hedging and is eager to understand how it works.

We also offer free webinars to explain our products. Please contact us if you are interested in this service.

How to Identify, Quantify, and Manage FX Risk

Understanding FX Spot Transactions

Understanding FX Forwards

Understanding Cross Currency Swaps

Understanding Non-Derivative Alternatives

General Reading on FX  -

MFX Summary on FX Risk in Microfinance

CGAP (May 2010) Microfinance Foreign Exchange Facilities Foreign capital investment in microfinance has been booming over the past four years. It can bring important benefits to MFIs, but it also comes with foreign exchange risk.

CGAP Focus Note (June 2009) Asset and Liabilities Management for Deposit Taking Microfinance As MFIs diversify their funding sources, sound asset and liability management (ALM) is critical to help MFIs assess and manage financial risk.

Women’s World Banking (2007) From Dollar to Dinar: The Rise of Local Currency Lending and Hedging in Microfinance This paper highlights recent advances in minimizing foreign exchange risk in microfinance, via both local currency lending by international investors, and risk hedging by microfinance institutions.

CGAP Focus Note (Jan 2006) Foreign Exchange Rate Risk In MicrofinanceThis Focus Note discusses issues related to foreign exchange rate risk in microfinance. It explains what exchange rate risk is, looks at techniques used by MFIs and investors to manage the risk, and makes recommendations on managing and avoiding risk.

 

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