Exchange Rate Risk : Allocating Exchange Rate Risk in Private Infrastructure Projects
Each year developing countries seek billions of dollars of investment in their infrastructure, and private investors, mostly in rich countries, seek places to invest trillions of dollars of new savings. Private foreign investment in the infrastruct...
| Main Authors: | , |
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| Format: | Viewpoint |
| Language: | English |
| Published: |
World Bank, Washington, DC
2012
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2003/12/12120226/exchange-rate-risk-allocating-exchange-rate-risk-private-infrastructure-projects http://hdl.handle.net/10986/11286 |
| Summary: | Each year developing countries seek
billions of dollars of investment in their infrastructure,
and private investors, mostly in rich countries, seek places
to invest trillions of dollars of new savings. Private
foreign investment in the infrastructure of developing
countries would seem to hold great promise. But foreign
investors must cope with volatile developing country
currencies. Many attempts to do so have created as many
problems as they have solved. This note proposes that
investors take on all financing-related exchange rate risk,
even though this may mean higher tariffs for consumers as a
premium for bearing that risk. |
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