Trade Finance Dialogue 2019

Workshop “TCX – Supporting German Africa-Portfolios via local currency hedging”

Trade Finance Dialogue continues: For another workshop within the framework of the event series, AKA invited German and European banks, in cooperation with the Federal Ministry for Economic Affairs and Energy, in order to introduce TCX, The Currency Exchange Fund.

30 guests took the opportunity to learn more about the highly relevant topic of hedging risks of illiquid foreign currencies with particular focus on supporting investments in Africa.

Building bridges and filling the gap:
Africa as a driving force for further development

Dr. Hans-Joachim Henckel, Head of Section at the Federal Ministry for Economic Affairs and Energy, outlined during his welcome speech that the event is a great opportunity for networking in order to get pace on the topic and set ground for establishing a new cooperation during the next few months.

Question of local currency extremely important
for future risk management

When a currency depreciates, the local borrowers face an increased debt servicing burden, pushing them into crisis management and preventing them from growing their business. At a micro level, currency risk causes burden and uncertainty for households and companies. The macro-perspective shows that currency depreciation can lead to instability in entire economic sectors, most obviously in the financial sector.

This challenge requires action and TCX is focusing on this since 2007. Senior Advisor Harald Hirschhofer and Head of Trading Othman Boukrami gave an overview of the structure and service portfolio of TCX. By hedging currency risk, TCX contributes to more sustainable development in emerging and frontier markets. Its aim is to develop local capital markets, while protecting its shareholders’ investments and their clients.
After the second part of their presentation focusing on the cooperation conditions as well as the different usage possibilities of TCX for investments and Export Financing in Africa, the speakers started a questions and answers session which turned into a lively discussion.

For more detailed information concerning several technical aspects, such as onboarding, pricing and valuation, please have a look at the presentation slides:

TCX presentation

What is the Trade Finance Dialogue?

Introduced by AKA in 2016, the Trade Finance Dialogue continues on from where the successful Open Space Dialogue left off in 2015. It serves as a platform for all Export and Trade business specialists in Germany and Europe.

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