Protect your business from exchange rate volatility
Protect your foreign currency receivables and payables from exchange rate volatility with a DBS FX Forward contract. FX Forwards fix the exchange rate for a particular date in the future, whether it’s days, months or years. The exchange is completed on that date at the pre-agreed rate, regardless of the prevailing market rate.
For example, if you expect to receive a USD payment from an overseas buyer in a month’s time, you will need to exchange such USD proceeds into CNY in a month’s time. However, you may also want to hedge against USD depreciation in the interim. That’s why you may wish to enter into a FX Forward contract as below:
Trade date: 8 January 2013
Spot rate: 1.2200
Settlement date: 1 month later (8 February 2013)
Principal amount: USD 1 million
Forward rate: 1.2198
Why choose DBS FX Forward?