Inconvertibility Coverage

Inconvertibility Coverage

Insurance that covers losses resulting from the inability to change one currency for another. Inconvertibility is the state in which a currency may not be exchanged for a foreign currency. Inconvertibility coverage reduces the risk associated with this possibility. For example, if one makes a capital gain on an investment denominated in Currency A, but cannot exchange it for Currency B, inconvertibility coverage will provide compensation.
References in periodicals archive ?
Late last year, OPIC announced that it would reinstate inconvertibility coverage for OPIC-eligible investment projects in Russia on a case-by-case basis.
A large investment bank making a loan in Argentina for a major infrastructure project would want to have currency inconvertibility coverage to make sure it can get loan payments out of the country.
Currency inconvertibility coverage compensates investors if new currency restrictions are imposed which prevent the conversion and transfer of remittances from insured investments, but it does not protect against currency devaluation.