Forward Foreign Currency Trading
Simple explanation of Forward transaction; the process of fixing the exchange rate for a future date.
Who can use Forward?
- Customers who make export and import transactions.
- Companies who has a exchange rate risk on their balance sheet.
- Customer who make transaction with purpose of assets management.
- Customers who wants to effectively manage cash flow.
- Customers who fallows exchange rate market and has expectations on exchange rates.
- Who would get foreign exchange in certain term or has debt.
- Customers who has income and payments in different currencies.
- Suitable for the customers who wants to guarantee the value of the funds TL or foreign currency.
- The conditions are determined between the bank and the customer.
- The term, amount and the exchange rate will be determined and is constant.
- The obligations are irreversible for both buyer and seller.
- Minimum of 50,000 USD or equivalent currency.
- Can make forward agreement on different currency pairs. (USD/TL, EUR/TL, EUR/USD, GBP/USD...)
Example Transaction 1:
This is suitable for the customers who wants to eliminate the risk of decline in the exchange rate or wants to exchange to TL from USD in a high exchange level.
|Transaction Amount||GBP 100,000|
|Maturity Date||92 day|
|Spot Market Rate||2,9450 (GBP/TL)|
|Forward Rate||2,9950 (GBP/TL)|
Maturity date; We do not look whether exchange rate is above or below the determined exchange rate GBP/TL 2,9950. Customer sells 100,000 GBP with GBP/TL 2,9950 to TL.
Example Transaction 2:
This is suitable for the customers who to eliminate the risk of the rise in the exchange rate or wants to exchange EUR in a high exchange level.
|Transaction Amount||EUR 100,000. -|
|Maturity Date||64 day|
|Spot Market Rate||2,5150 (EUR/TL)|
|Forward Rate||2,5350 (EUR/TL)|
Maturity date; We do not look whether exchange rate is above or below the determined exchange rate EUR/TL 2,5350. Customer buys 100,000 EUR with EUR/TL 2,5350.