Brazil’s government is set to unveil new initiatives to aid foreign investors in sustainable development with foreign exchange hedging, minimizing currency and fiscal risks for the Treasury.
The proposal includes a new route for approximately $2 billion in currency derivatives, contracted by the Inter-American Development Bank (IDB) and dispersed in Brazil by the central bank.
The program will take advantage of the IDB’s triple-A credit rating to enable longer-term and less expensive currency derivatives to stimulate foreign investment in Brazil’s “green” development projects.
The government will also allow the central bank to extend the terms of its $100 billion stock of swaps to improve liquidity and lower currency volatility.
The foreign exchange package will also include an IDB-backed liquidity line for structured project financing for green initiatives.