Comprehensive Hedging Offer by iBanFirst
iBanFirst has developed a comprehensive hedging offer with various types of hedges to accommodate the most common use cases, including:
Forwards
Flexible Forwards
Dynamic Forwards
Forwards
Fixed Forwards allow you to lock in a currency exchange rate for a specific date in the future. They are particularly useful when you need to pay an invoice in a foreign currency by a certain date.
Maturity: The maturity period can range from 3 days to 24 months.
Settlement: Forwards are automatically settled on the maturity date, meaning the amounts purchased and sold are credited and debited to/from the corresponding currency account automatically.
Flexible Forwards
Flexible Forwards share the same characteristics as fixed forwards (i.e., guaranteed currency exchange rate, a maturity date between 3 and 365 calendar days, and automatic settlement on maturity date), while offering additional flexibility.
Use Case: They are ideal for situations where you need to pay suppliers in foreign currencies but are unsure of the exact payment dates.
Draw Period: During the draw period, you can buy currencies at the guaranteed exchange rate for future payments. The remaining amount will be automatically settled on the maturity date.
Dynamic Forwards
Dynamic Forwards retain the key features of fixed forwards (i.e., guaranteed exchange rate, a maturity date from 3 to 365 calendar days, and automatic settlement on maturity date) while offering increased responsiveness to market conditions.
Market Advantage: Dynamic forwards allow you to benefit from a better exchange rate at the expiry date, depending on market fluctuations.
Use Case: They can be used to secure the counter-value of an invoice in a foreign currency while also retaining the option to take advantage of a more favorable rate at the settlement date.
Conclusion
Forwards are particularly relevant for companies looking to capitalize on market opportunities while enjoying the security of a guaranteed currency exchange rate. If you want to learn more about how these hedging options can benefit your business, please reach out to your account manager.