- APC manages nearly 6 billion guilders, with more than half of that invested abroad.
- Around 30% of those foreign investments are in international equities held in various currencies.
- Currency fluctuations, especially when the dollar weakens and other currencies strengthen, lead to indirect losses when assets are recalculated into guilders.
- These losses are reflected in APC’s financial statements and can put pressure on its funding ratio.
- APC has a reserve to buffer against market losses and applies a strategic investment policy that considers currency risk.
- However, with a current funding ratio of just under 108%, there is only limited room for pension indexation.
- Poor investment returns could quickly reduce that margin.
- While Dutch funds use financial instruments to hedge currency risks, it is unclear to what extent Curaçao’s funds apply similar protective measures.
- Curaçao’s pension system remains vulnerable to global market fluctuations, especially amid rising interest rates, currency instability, and geopolitical tensions.
https://www.curacaochronicle.com/post/main/falling-us-dollar-impacts-pension-funds-in-curacao-and-the-netherlands/
