TCX provides currency hedging for eligible transactions in currencies, tenors and structures that are not sufficiently covered by commercial markets.
FX forwards and cross currency swaps form the core of our current offering.
Under its 2026–2030 strategy, TCX is also developing a broader range of risk management and capital markets solutions in response to evolving client and market needs.
Aligning debt service with borrower cash flows
Currency hedging can address the mismatch that arises when financing is denominated in a hard currency but the borrower earns in local currency. Without protection, exchange rate movements can increase debt service independently of the performance of the underlying business or project.
By aligning the borrower’s payment obligations with the currency of its revenues, hedging can provide greater certainty over future cash flows and reduce the risk that currency movements affect the sustainability of the financing.
TCX offers cross-currency hedging products, which are essentially agreements between two parties to exchange two currencies at a specific time in the future.
Forward contracts are agreements to purchase or sell a set amount of a foreign currency at a specified price and at a predetermined time in the future. Typically, with this product a client sells a single, local currency, fixed amount and in return receives a fixed amount in US dollars from TCX at an exact date in the future.
Cross-currency swaps are products under which two parties agree to exchange multiple fixed amounts (normally a loan principal and interest amounts) denominated in two different currencies. Again, usually the clients agrees on selling local currency amounts to TCX, which in exchange pays US dollars. A cross currency swap can be described as a series of forwards bundled together.
The needs of borrowers, lenders and investors extend beyond conventional FX forwards and cross currency swaps. Over the 2026–2030 strategy period, TCX plans to expand its toolkit in three areas: serving a broader range of client needs, providing more flexible risk management and creating additional routes for capital to support local currency lending.
These solutions form part of TCX’s strategic product development agenda and are not yet generally available across all markets. Availability will depend on the currency, transaction structure, client requirements and stage of product development.
Product availability varies by currency, tenor, transaction size, cash flow structure and market conditions. Review TCX’s currency coverage, available rate types and indicative product availability.