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Adjusting CVA Transfer Values for Inflation: Frequently Asked Questions (FAQs) for Food Security Cluster Coordinators

1 November 2023 — By The Global Food Security Cluster Cash and Market Working Group (GFSC CMWG)

Over the past 3 years, the global community has experienced a series of unanticipated, challenging, and interrelated shocks: COVID-19, conflict, climate change, and rising costs. A significant number of countries experienced substantial levels of local currency depreciation coupled with high inflation, thereby putting pressure on the purchasing power of entire communities. As a result, CVA activities – already in use to meet food security needs in humanitarian responses – were expanded.

Stakeholders, and particularly CVA actors, must understand how to manage the risks associated with economic volatility – including inflation, currency depreciation, among others. As Food Security Cluster Coordinators frequently inquire more information on the technical and operational processes to efficiently adjust CVA transfer values in context of food security, the CMWG developed this FAQ note to support the FSC efforts in maintaining affected populations’ purchasing power and guarantee effective food assistance in times of high inflation and depreciation.

This resource addresses questions ranging from data quality concerns, the timing and frequency of transfer value revisions, to how to navigate complex working relationships among cluster partners. It focuses on four areas: