⇽ Currencies list

Hedging Foreign Exchange Risk in ARS - Argentine Peso

Drapeau Hedging Foreign Exchange Risk in ARS - Argentine Peso

The Foreign Exchange Risk in Argentine Peso (ARS)

When conducting transactions with Argentina, you may need to send or receive payments in Argentine Peso. You are then naturally exposed to foreign exchange risk. Indeed, between the time you invoice your client in ARS and the time you collect the ARS, or conversely, between the time your supplier issues their invoice in ARS and you settle this invoice in ARS, the EUR/ARS exchange rate may have moved in your favor or against you. It is to eliminate or minimize this risk of EUR/ARS exchange rate movement (assuming your accounting currency is EUR) over a determined period that you can implement hedges on the EUR/ARS. By locking in the EUR/ARS rate in advance, you effectively gain better visibility on your future cash flows in Argentine Peso (ARS) and secure your EUR/ARS budget rate.

Foreign Exchange Risk Hedging on Argentine Peso (ARS) with Mondial Change

Mondial Change allows you to hedge your foreign exchange risk on the Argentine Peso (ARS). Currently, foreign exchange risk hedging on the Argentine Peso can only be done through NDF (non-deliverable forwards) contracts. The NDF is a hedging instrument used to cover your foreign exchange risk on partially or non-convertible currencies. At the contract's expiration date, the rate at which the contract was concluded is compared with the fixing rate. The latter is official and published daily by the Central Bank of the concerned country. The NDF price represents the probability of a currency revaluation (or devaluation). Therefore, the NDF price will not be linked to the interest rate differential between the two currencies involved. The NDF thus allows you to hedge your foreign exchange risk without any cash flow being exchanged in the non-convertible currency. You can schedule a meeting with our trading room. An expert market advisor will assist you in setting up your foreign exchange hedges on the Argentine Peso (ARS).

To obtain accurate quotes on your Argentine Peso (ARS) hedges, we invite you to contact our trading room.

Mondial Change Answers All Your Questions on Foreign Exchange Risk Hedging for Your Argentine Peso (ARS) Operations

Are there minimum or maximum amounts to set up hedges in Argentine Peso (ARS)?

The maximum amount of hedges in Argentine Peso (ARS) that you can validate primarily depends on the size of the forward exchange line granted to you. The line conditions granted depend on the review of your financial statements. Regarding minimum sizes, we generally do not take hedges for amounts below 10,000 EUR (or equivalent in other currencies).

What is the maximum possible maturity for hedges in Argentine Peso (ARS)?

Generally, we do not offer hedges in Argentine Peso (ARS) for maturities exceeding 24 months, but this can be considered on a case-by-case basis. Please contact our trading room for a personalized assessment of your needs.

What are the setup fees for hedges against foreign exchange risk in Argentine Peso (ARS)?

All fees related to setting up hedges in Argentine Peso (ARS) are included in the exchange rate communicated to you before validating your operation. The hedging is done by phone with a trading room operator. No fees are applied to the use of your hedges.

Is a security deposit required to take a hedge in Argentine Peso (ARS)?

Again, this depends on the conditions of your forward exchange line. Thanks to its network of partners, Mondial Change generally manages to obtain forward exchange lines without an initial security deposit. Depending on your line conditions, margin calls may be triggered on your Argentine Peso (ARS) hedging contracts if the EUR/ARS rate (or any other pair on which you have validated a hedge) deteriorates beyond the variation margin or beyond your OTM. In this case, you must deposit funds as collateral to keep your Argentine Peso (ARS) contracts open. Based on your financial statements, lines without margin calls can sometimes be granted.

What is the current interest rate on the Argentine Peso (ARS)?
The current interest rate on the Argentine Peso (ARS) is "Currency Rate".

Are there carry or discount points on NDF contracts in Argentine Peso (ARS)?

It all depends on whether you are a buyer or seller of Argentine Peso (ARS) and against which currency you are trading the Argentine Peso. For example, against the euro: If you are a buyer of Argentine Peso (ARS) against the EUR, then there are report points because the interest rate of the Argentine Peso (ARS) is supérieur to that of the EUR. Conversely, if you are a seller of Argentine Peso (ARS) against the EUR, then there are déport points.

YOUR HEDGING NEED IN ARS
Ellipse
Ellipse