Currency Risk Management in the Public Sector: A Study of the US Agency for International Development

The purpose of this paper is to extend the literature on financial derivatives to the U.S. Agency for International Development (USAID). The authors argue that although the USAID does not actively engage in risk management techniques, it is just as important an issue in the public sector as it is in the private sector. Given the scope of USAID operations worldwide the federal government has much to gain from adoption of risk management techniques that will lessen the budgetary impact of currency rate fluctuations.