The Currency Exchange Fund (TCX) together with Sri Lanka-based economic think tank and management advisory firm, Econsult Investment & Advisory Services Pvt Ltd, jointly organized its first ever "Investor Forum" in the country, last month in keeping with the strategic road map laid down by Central Bank and the Government's policy framework, promoting overseas capital funding.
TCX, which is a Netherlands-based fund set up by Development Finance Institutions (DFI) to mitigate long term currency exchange rate risks in frontier markets, brought together seven of its shareholders to Colombo to hear some of the leading financing fims which were invited to showcase investment and funding opportunities in the country, the statement said. There were firms in the energy, micro finance and transportation sectors.
Jerome Pirouz, Vice President TCX told the Business Times on the sidelines of the forum that when TCX first visited Sri Lanka to promote local currency solutions, they saw that the key challenge for the non-bank financial institutions was not so much the currency exchange risk but getting long term project funding. "Given that TCX is not in the business of taking credit risk, it seemed logical to organize an event where local firms could meet our shareholders as potential long term lenders to them," he added.
Brice Ropion, COO at TCX, added that the growth story in Sri Lanka is attractive and as such that TCX sees the country's need for international funding to supplement local sources. "Such funding is typically available in only hard currency, so we-TCX, have decided to step in to provide solutions that would take this risk away from either the lender or the borrower, depending on who eventually bears the risk. Reducing this risk brings greater certainty to those involved, enabling them to charge lower and stable prices to their clients, thus contributing to the overall stability of a financial system."
Harald Hirschoffer, Head of Research at TCX noted that realizing the tremendous growth potential in the country after the end of the conflict will require to encouraging national savings and - while this is done - deepening access to sustainable foreign financing sources. "By offering exchange rate solutions services, TCX would like to contribute to Sri Lanka's growth by making foreign financing more sustainable while protecting local borrowers from sudden exchange rate swings," he said.
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