David Vavra presents research on hedging public debt at Shanghai Sustainable Finance workshop

OGResearch Managing Partner David Vavra presented at the Finance for Development Lab and Shanghai Institutes for International Studies Workshop on Sustainable Development Finance in a Fragmented World in Shanghai. He shared insights from OGResearch's paper, “Hedging Public Sector’s FCY Debt Exposure – A Countercyclical Shock Dampening Mechanism?”.

David highlighted that the net open foreign-exchange position (NOFXP) is a key factor in determining resilience to exchange rate crises. A stronger NOFXP not only lowers the likelihood of a crisis but also reduces its impact on output and consumption. In addition, governments gain more room to use fiscal and monetary policy effectively during downturns by maintaining a well-hedged sovereign balance sheet.