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Overview

Scaling up financing for development is crucial to achieving the 2030 Agenda for Sustainable Development. The financing gap to meet the Sustainable Development Goals (SDGs) in low- and middle-income countries (LMICs) is estimated at USD 4 trillion annually. Multilateral development banks (MDBs) are positioned to play a critical role in bridging this gap. However, increasing the scale of financing alone is insufficient to ensure debt sustainability. Many LMICs remain heavily exposed to foreign currency risk, which can amplify debt vulnerabilities and lead to significant increases in debt servicing costs when exchange rates fluctuate.

Local currency financing by MDBs can significantly mitigate these vulnerabilities by reducing currency mismatches on LMIC balance sheets. Recognising these advantages, institutions such as the United Nations World Bank and G20 have emphasised the importance of expanding local currency financing. However, there has been little systematic analysis of how MDBs can scale up these efforts, and concrete policy solutions remain underdeveloped.

This webinar presents findings from an extensive study funded by the MDB Challenge Fund, addressing this critical gap. It examines current local currency financing practices by MDBs, identifies barriers—including legal, regulatory, currency and credit risk challenges—and offers targeted policy recommendations to strengthen MDBs’ local currency financing capacities.

Who should attend?

Policymakers, MDB officials, development finance practitioners, academics, and stakeholders interested in sustainable finance, debt management and economic development.

Programme

13:00 - Overview of the report, key barriers to MDB local currency financing, and legal and regulatory matters - Annina Kaltenbrunner, Professor of Global Economics at Leeds University Business School

13:15 - Credit and exchange rate risk analysis and policy recommendations – Dr Bruno Bonizzi, Associate Professor at Hertfordshire Business School

13:30 - Audience question-and-answer session with all authors of the report

Annina Kaltenbrunner, Professor of Global Economics, Leeds University Business School

Dr Bruno Bonizzi, Associate Professor, Hertfordshire Business School

Dr Karina Patrício Ferreira Lima, Senior Lecturer in International Financial Law, University of Leeds

Karsten Kohler, Associate Professor of Economics, University of Leeds

Guilherme Klein Martins, Lecturer in Economics, University of Leeds

Ivan Weigandi, Postgraduate Researcher, University of Leeds

14:00 - Webinar close

Join us to explore pathways for MDBs to scale up local currency financing, enhance developmental outcomes in LMICs and effectively manage financial risks.

We kindly ask that upon registering, you enter all your required details on the page that follows so that we know how this event is relevant to you and the work you do. Thank you.

Enhancing Multilateral Development Banks' Local Currency Financing