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Discover the various FX risk management tools and their use cases

Discover the various FX risk management tools and their use cases

François Cosnier avatar
Written by François Cosnier
Updated over a week ago

iBanFirst offers a comprehensive range of forward contracts to help businesses manage their exposure to foreign exchange risk. Three types of contracts are available, each designed to meet specific use cases:

  • Fixed Forward Contract

  • Flexible Forward Contract

  • Dynamic Forward Contract

Fixed Forward Contract

A fixed forward contract allows you to lock in an exchange rate for a specific date in the future.
This is the ideal solution if you need to make a payment in a foreign currency on a set date.

Key Features:

  • Maturity: from 3 days to 24 months

  • Automatic settlement: the purchased amount is credited to your currency account on the maturity date

  • Best for: securing a single scheduled payment

Flexible Forward Contract

This contract combines the security of a guaranteed exchange rate with the flexibility of usage over time.
Perfect for covering multiple payments over a period, especially when payment dates are not fixed.

Key Features:

  • Maturity: from 3 to 365 calendar days

  • Flexible usage: use the locked-in rate anytime during the coverage period

  • Automatic conversion of any unused amount at maturity

  • Best for: covering a series of payments with uncertain due dates (e.g. supplier invoices)

Dynamic Forward Contract

A dynamic forward contract offers a guaranteed rate while also giving you the opportunity to benefit from a better market rate at maturity.

Key Features:

  • Maturity: from 3 to 365 calendar days

  • Market advantage: potential to access a more favorable rate at the contract’s expiration

  • Automatic settlement at maturity

  • Best for: companies looking to secure a future invoice while still taking advantage of market opportunities

Conclusion

iBanFirst’s forward contracts help businesses effectively hedge against currency fluctuations while offering flexibility and security.
To learn more and find the right solution for your needs, get in touch with your account manager.

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