iBanFirst has developped a comprehensive hedging offer, with multiple hedge types to fit the most common use cases, including:

  • Forwards
  • Flexible forwards
  • Dynamic forwards

Forwards

Fixed forwards allow you to lock in a currency exchange rate to use at a set date in the future. They can be used for instance when you need to pay an invoice in foreign currency at a specific date.

Maturity can go from 3 days to 24 months.

Forwards are automatically settled on maturity date, ie the amounts purchased and sold are automatically credited and debited to / from the corresponding currency account.

Flexible forwards

Flexible forwards have the same characteristics as forwards (ie, a guaranteed currency exchange rate, a maturity date between 3-365 calendar days, and automatic settlement on maturity date), while giving extra flexibility. 

They can be used for instance when you need to pay your suppliers in foreign currencies, without being certain of the exact payment dates.

Flexible forwards can indeed be used during the draw period to buy currencies, at the guaranteed exchange rate, to be used for a payment.

The remaining amount is automatically settled on maturity date.

Dynamic forwards

Dynamic forwards have the same characteristics as forwards (ie, a guaranteed exchange rate, a maturity date from 3-365 calendar days, and automatic settlement on maturity date), while given more reactivity to market conditions.

Dynamic forwards indeed allow you to benefit from a better exchange rate at expiry date, depending on market conditions.

They can be used for instance to guarantee the counter-value of an invoice in foreign currency, while also keeping the opportunity to benefit from a more favourable rate depending on market conditions at the settlement date.

Forwards are particularly relevant for companies that do not want to miss on a market opportunity, while still enjoying the peace of mind of a guaranteed currency exchange rate.

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