Shinhan Bank secured the Green Climate Fund's (GCF) first foreign exchange derivatives transaction since the fund was established. It expanded the scope of cooperation into foreign exchange following last year's joint investment in an eco-friendly energy fund.

Shinhan Bank said on Aug. 11 that it signed an FX derivatives deal worth about $200 million with the GCF on Aug. 6.

The transaction is the first FX derivatives deal the GCF has signed since it was established. Shinhan Bank said the deal will expand cooperation with the GCF from the existing investment area into foreign exchange.

An FX derivatives transaction is a financial deal used to manage risks arising from exchange rate fluctuations. The GCF receives contributions from donor countries in various currencies, meaning the value of those contributions can change with exchange rate movements.

The GCF started an FX hedging programme using FX derivatives to reduce volatility in the value of its contributions and to manage its funds in a stable manner, and signed its first deal with Shinhan Bank this time.

A Shinhan Bank official said, "We will continue to seek various opportunities for cooperation with the GCF and expand partnerships with international organisations and global financial institutions to contribute to revitalising global green finance."