Manage your different currencies exposures
Exchange rate volatility can affect the value of your cash flows, especially when they are denominated in foreign currencies.
At Treasury & Markets, we have a wide range of FX solutions to assist you in managing your Foreign Exchange requirements in different currencies. Our regular economic updates and thematic market research articles can further assist you in making more informed decision making in managing your FX exposures.
|Range of Products Offered
Spot FX Contracts
A spot FX contract is a binding obligation where you and the Bank agree to exchange a specified amount of one currency for another currency at a specified FX rate on a future date. A Spot FX contract is where delivery takes place within 2 working days after the transaction date.
Forward FX Contracts
A forward FX contract is a binding obligation where you and the Bank agree to the delivery that takes place more than 2 working days after the transaction date. There are two types of Forward FX Contract:
(a) Fixed Forward FX – delivery of contract takes place on a particular fixed date after Spot day
(b) Window Forward FX – delivery of contract takes place within a particular period after Spot day before maturity
Forward FX Contracts are generally used to offset or hedge against future FX rates exposure on receivables/ payables in different currencies.
Currency options give the holder the right but not the obligation to sell / buy a currency against another currency in the future at a predetermined FX rate (strike price). The options enable you to take a view on currency movements while protecting your downside risk.
If foreign exchange rates move against you, you may exercise the option at the predetermined exercise price. On the other hand, if foreign exchange rates move in your favour, you may just let the option expire and contract at prevailing market rates.
An investor may buy a currency call / put option to hedge against unfavourable movement in exchange rates while maintaining the ability to benefit from favourable exchange rate movement. A buyer of a call option can lock in maximum buying price of a future foreign exchange rate. A buyer of a put option can lock in minimum selling price of a future foreign exchange rate. At Treasury & Markets, the range of option embedded instruments, amongst others include:-
- Vanilla Options
- Vanilla Options
- Window Plus Forward
- Barrier Options