Are the loans available in multiple currencies? Are there any risk mitigators available to protect from currency conversions or fluctuations?
Answer – Most trade finance loans are available in the major international currencies: U.S. Dollar, Euro, Pounds, Yen, etc. Often this trade financing is appealing to local companies which earn dollar-based export revenues and therefore have a capability to repay the dollar-based loan. On occasion, depending on the market, the commercial banks may have an ability to loan in local currencies. There are also some markets with special Export Credit Agency programs which allow guarantees in local currencies such as the South African Rand or Indian Rupee. Another option is to protect from currency fluctuations with a financial hedge or forward contract. DFI can advise the best strategy on a case-by-case basis.
