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IT
Tearing down the currency wall
['Jayant Sinha', 'Aug.']
Eco-Business
But the channel connecting them is blocked by what amounts to a currency wall.
In a solar auction, for example, the clearing tariff is set according to the cost of equity in the local currency — the same currency in which investors’ returns are denominated.
Meanwhile, three steps can go a long way toward dismantling the currency wall.
The second step is to tackle currency risk directly, as Brazil has done.
The currency wall was built one risk premium at a time.