Brazil readies long-dated FX hedging scheme for green projects

Development bank IDB will lend its credit rating to unlock cheaper USD/BRL hedges out to 25 years


The Inter-American Development Bank, alongside the government of Brazil, has announced a new structure that involves lending out its AAA credit rating to foreign investors to provide them with access to cheaper long-dated foreign exchange hedges for projects in the country.

While liquidity for US dollar/Brazilian real hedges is scarce beyond the one-year point, the new structure allows Brazilian banks to tap the IDB’s credit rating to offer FX derivatives hedges to foreign investors in local

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