Payment Services, FX risk protection

In order to eliminate foreign currency risk, i.e. money market changes in the future, ProCredit Bank offers to importers the possibility to enter into currency forward contract.

Quasi forward sales of foreign exchange imply an agreement to execute a transaction at a specified future date, at a pre-determined price and in a pre-determined amount. This hedging instrument removes all uncertainties with respect to currency fluctuations, as clients are guaranteed a fixed exchange rate on the date of agreeing the transaction for purchase of a currency for a future date.

The forward exchange rate is calculated as difference in the exchange rate at the date of foreign exchange sales and difference in interest rates of currencies traded for the period until maturity.

If clients opt for this type of hedging, they thereby undertake to submit the agreed amount of funds into the account with the Bank at the date of transaction agreement, which the Bank shall transfer into term deposit account on the same day.

Quasi forward sales of foreign exchange refer to a term of more than 2 days but no more than 1 year.

Should you require any further information, please visit the nearest branch of ProCredit Bank.