Budgets of Global Fund grants are either finalized in US dollars or Euros, depending on the new funding model allocation currency choice, taking into account the payment currency for each budget line. The allocation currency should be requested by the applicant no later than 30 days after the issuance of the allocation letter to the country. Global Fund grant budgets should be prepared using the different currency denominations of each budget line (i.e. the currencies in which the budget item will be invoiced or charged) converted, where applicable, to the currency of the Grant Agreement at an appropriate exchange rate.

Any inflation factor should take account of the currency denomination of the budget item (local currency-denominated items may require a different rate of inflation to foreign currency-denominated items). The relationship between the two variables—exchange rate and inflation rate—should be described in the general budget assumptions.

The exchange rate used in the budget should be that which, based on available evidence, reflects the best estimate of the rate at which the PR will exchange their grant currency into local currency over the term of the grant. The method and/or references used should be fully disclosed in the general budget assumptions. The exchange rate may be budgeted at different rates over the term of the budget, provided that assumptions behind the rates are disclosed. No exchange rate “contingencies” may be included in the budget. If the country’s exchange rate is fixed or managed by the domestic authorities, the budget should follow the given official fixed rates.