fbpx 39312-012: Minimizing Foreign Exchange Settlement Risk in ASEAN+3 Region | Asian Development Bank

Regional: Minimizing Foreign Exchange Settlement Risk in ASEAN+3 Region

Sovereign (Public) Project | 39312-012 Status: Closed

In cross border bond market transaction, true Delivery versus Payment (DvP) is rarely achieved due to differences in operational hours of the national payment systems which resulted in counterparties of FX transactions facing principal risks. Although FX risks cannot be totally eliminated, the development of a well functioning FX settlement system where transaction can be executed in a timely, certain and cost efficient manner can help minimize Herstatt Risk and contribute to a more efficient bond market. The study aims to explore various ways to minimize FX settlement risk for cross border bond transaction in the ASEAN 3 region.

Project Details

Project Officer
Siackhachanh, Avonechith Office of Regional Economic Integration Request for information
Country
  • Regional
Sector
  • Finance
 
Project Name Minimizing Foreign Exchange Settlement Risk in ASEAN+3 Region
Project Number 39312-012
Country Regional
Project Status Closed
Project Type / Modality of Assistance Technical Assistance
Source of Funding / Amount
TA 6338-REG: Minimizing Foreign Exchange Settlement Risk in ASEAN+3 Region
Japan Special Fund US$ 700,000.00
Strategic Agendas Regional integration
Drivers of Change Private sector development
Sector / Subsector

Finance / Money and capital markets

Gender Equity and Mainstreaming No gender elements
Description In cross border bond market transaction, true Delivery versus Payment (DvP) is rarely achieved due to differences in operational hours of the national payment systems which resulted in counterparties of FX transactions facing principal risks. Although FX risks cannot be totally eliminated, the development of a well functioning FX settlement system where transaction can be executed in a timely, certain and cost efficient manner can help minimize Herstatt Risk and contribute to a more efficient bond market. The study aims to explore various ways to minimize FX settlement risk for cross border bond transaction in the ASEAN 3 region.
Project Rationale and Linkage to Country/Regional Strategy
Impact
Project Outcome
Description of Outcome
Progress Toward Outcome
Implementation Progress
Description of Project Outputs
Status of Implementation Progress (Outputs, Activities, and Issues)
Geographical Location Regional
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation
Business Opportunities
Consulting Services Individuals or consulting firm will be selected under an output based lump sum contract to carry out the study over a time period of 8 calendar months.
Responsible ADB Officer Siackhachanh, Avonechith
Responsible ADB Department Office of Regional Economic Integration
Responsible ADB Division OREF
Executing Agencies
Asian Development Bank
6 ADB Avenue,
Mandaluyong City 1550, Philippines
Timetable
Concept Clearance 03 Oct 2005
Fact Finding 11 Mar 2006 to 25 Mar 2006
MRM -
Approval 25 Aug 2006
Last Review Mission -
PDS Creation Date 18 Jan 2008
Last PDS Update 12 Sep 2006

TA 6338-REG

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
25 Aug 2006 - 25 Aug 2006 31 Mar 2007 30 Jun 2009 -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
700,000.00 0.00 0.00 0.00 0.00 0.00 700,000.00 25 Aug 2006 665,604.68

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