Publication:
Exchange Rate Risk : Reviewing the Record for Private Infrastructure Contracts

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dc.contributor.authorGray, Philip
dc.contributor.authorIrwin, Timothy
dc.date.accessioned2012-08-13T14:40:48Z
dc.date.available2012-08-13T14:40:48Z
dc.date.issued2003-06
dc.description.abstractAmong the key risks facing foreign private entities investing in the infrastructure of developing countries is depreciation or devaluation of the local currency. Indeed, over the past 25 years developing country currencies lost 72 percent of their value relative to the U.S. dollar on average-and about a fifth lost more than 99 percent of their value. Sustainable private investment in infrastructure depends on addressing this risk well. Private infrastructure contracts in developing countries have usually passed much of this risk on to customers or the government. But because devaluations and large depreciations in developing countries often occur in the context of macroeconomic and financial upheaval, such risk allocations cannot always be made to work. The difficulty arises because the contracts raise prices precisely when the economy is suffering the most. If the government bears the risk because a state-owned utility is purchasing power from an independent power producer at prices denominated in U.S. dollars, for example, a contract will require steep increases in local currency prices just when the utility ' s revenues-and those of its owner, the government-are likely to be declining.en
dc.identifierhttp://documents.worldbank.org/curated/en/2003/06/2539575/exchange-rate-risk
dc.identifier.citationViewpoint. -- Note no. 262 (June 2003)
dc.identifier.doi10.1596/11294
dc.identifier.urihttps://hdl.handle.net/10986/11294
dc.languageEnglish
dc.publisherWorld Bank, Washington, DC
dc.relation.ispartofseriesViewpoint
dc.rightsCC BY 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo
dc.subjectEXCHANGE RATE RISK
dc.subjectPRIVATE INFRASTRUCTURE
dc.subjectDEVELOPING COUNTRIES
dc.subjectPRIVATIZATION
dc.subjectCURRENCY DEPRECIATION
dc.subjectPURCHASING POWER
dc.subjectTARIFFS
dc.subjectMACROECONOMIC ACTIVITY
dc.subjectTAXPAYERS ARBITRAGE
dc.subjectCAPITAL MARKETS
dc.subjectCONSUMER PRICE INDEX
dc.subjectDEBT
dc.subjectDEVALUATION
dc.subjectDEVELOPING COUNTRIES
dc.subjectDEVELOPING COUNTRY
dc.subjectEXCHANGE RATE
dc.subjectEXCHANGE RATE RISK
dc.subjectFINANCIAL CRISIS
dc.subjectINFLATION
dc.subjectINFLATION RATES
dc.subjectINTEREST RATE
dc.subjectINTEREST RATES
dc.subjectLOCAL CURRENCY
dc.subjectLOCAL GOVERNMENTS
dc.subjectNATIONAL INCOME
dc.subjectPRICE INCREASES
dc.subjectPRIVATE SECTOR
dc.subjectPRIVATIZATION
dc.subjectPRODUCERS
dc.subjectPUBLIC POLICY
dc.subjectPURCHASING POWER
dc.subjectSTANDARD DEVIATION
dc.titleExchange Rate Risk : Reviewing the Record for Private Infrastructure Contractsen
dspace.entity.typePublication
okr.date.doiregistration2025-04-29T09:11:13.848499Z
okr.doctypePublications & Research
okr.doctypePublications & Research::Brief
okr.docurlhttp://documents.worldbank.org/curated/en/2003/06/2539575/exchange-rate-risk
okr.globalpracticeMacroeconomics and Fiscal Management
okr.globalpracticeEnvironment and Natural Resources
okr.globalpracticeFinance and Markets
okr.guid537881468762619080
okr.identifier.externaldocumentum000090341_20031008090528
okr.identifier.internaldocumentum2539575
okr.identifier.report26925
okr.language.supporteden
okr.pdfurlhttp://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2003/10/08/000090341_20031008090528/Rendered/PDF/269250PAPER0VP0note0no102620Gray1062703.pdfen
okr.topicInsurance and Risk Mitigation
okr.topicBanks and Banking Reform
okr.topicMacroeconomics and Economic Growth::Macroeconomic Management
okr.topicEconomic Theory and Research
okr.topicEnvironmental Economics and Policies
okr.topicFinance and Financial Sector Development
okr.topicEnvironment
okr.unitOff of VP
okr.unitFPD&IFC Chief Econ-WB (FPDVP)
relation.isAuthorOfPublication4cdd14e3-d673-5b41-bfda-166d60c2e404
relation.isAuthorOfPublication.latestForDiscovery4cdd14e3-d673-5b41-bfda-166d60c2e404
relation.isSeriesOfPublication1067ecbf-b217-4376-a77e-64594be2b212
relation.isSeriesOfPublication.latestForDiscovery1067ecbf-b217-4376-a77e-64594be2b212
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