Judgment Currency (Banking & Finance Glossary)

Summary

The Judgment Currency clause is used in Credit Agreements to protect Lenders against losses that may occur if the original currency of the loan is not the currency for the purpose of obtaining judgment in any court. There is typically a provision in the Credit Agreement that allows for the original currency to be converted to this currency, the Judgment Currency. This arises from the fact that a commercial court can only award settlements in the legal tender of the country in which it has jurisdiction. This provision is usually included in transactions where there is a foreign Borrower.