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IFC Sets up First Local Currency Facility in Mongolia to Help XacBank Manage Exchange Rate Risks

Ulaanbaatar, Mongolia, November 1, 2013 — IFC, a member of the World Bank Group, has signed a swap agreement with XacBank, offering a $50 million facility to help Mongolia’s fourth-largest lender hedge its foreign exchange risks by converting U.S. dollar-denominated borrowings into Mongolian Tugrik. The deal marks IFC’s first local-currency offering in the country and will help the bank enhance its lending capacity to support micro, small and medium businesses.
IFC is one of a few financial organizations that extend long-maturity risk management products to companies in emerging markets. IFC helps firms improve their risk management and enhance their creditworthiness by helping them to access the international derivatives markets in order to hedge currency-, interest rate-, or commodity-price exposure.
“IFC’s versatile services are critical for XacBank to cope with Mongolia’s fast-paced growth,” said XacBank Chief Executive Officer Bat-Ochir Dugersuren. “IFC helps us better manage risk so that we can concentrate on scaling up support for micro, small and medium businesses that are the backbone of Mongolia’s long-term growth.”
IFC began its partnership with XacBank in 1999 and advised the lender on its transformation from a microfinance provider into a commercial bank in 2001. IFC became a shareholder of XacBank’s parent company, TenGer Financial Group, in 2008 and increased its equity stake earlier this year. Additionally, IFC has launched new initiatives with XacBank to support climate-friendly projects and women-focused businesses.
“IFC is stepping up its support to Mongolia during difficult times when currency fluctuation is posing challenges to stable business growth,” said IFC’s Country Manager for China, Mongolia, and Korea Hyun-Chan Cho. “By leveraging its credit status and global network, IFC will help XacBank and other Mongolian clients mitigate foreign-exchange risks in a timely and innovative way.”
About IFC
IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector. Working with private enterprises in more than 100 countries, we use our capital, expertise, and influence to help eliminate extreme poverty and promote shared prosperity. In FY13, our investments climbed to an all-time high of nearly $25 billion, leveraging the power of the private sector to create jobs and tackle the world’s most pressing development challenges. For more information, visit
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