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Hedging Foreign Exchange Risk in AWG - Aruban Florin

Drapeau Hedging Foreign Exchange Risk in AWG - Aruban Florin

The Foreign Exchange Risk in Aruban Florin (AWG)

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

Foreign Exchange Risk Coverage on Aruban Florin (AWG) with Mondial Change

Mondial Change allows you to hedge your foreign exchange risk on the Aruban Florin (AWG). The foreign exchange risk coverage on the Aruban Florin can currently 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 revaluation (or devaluation) of the currency. 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 in the non-convertible currency. You can schedule a meeting with our trading desk. An expert market advisor will assist you in setting up your foreign exchange hedges on the Aruban Florin (AWG).

To obtain accurate quotes on your Aruban Florin (AWG) hedges, we invite you to contact our trading desk.

Mondial Change Answers All Your Questions on Foreign Exchange Risk Coverage for Your Aruban Florin (AWG) Operations

Are there minimum or maximum amounts to set up hedges in Aruban Florin (AWG)?

The maximum amount of hedges in Aruban Florin (AWG) 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 Aruban Florin (AWG)?

Generally, we do not offer hedges in Aruban Florin (AWG) for maturities exceeding 24 months, but this can be considered on a case-by-case basis. Please contact our trading desk for a personalized study of your needs.

What are the setup fees for hedges against foreign exchange risk in Aruban Florin (AWG)?

All fees related to setting up hedges in Aruban Florin (AWG) are included in the exchange rate communicated to you before the validation of your transaction. The hedging is done by phone with a trading desk operator. No fees are applied to the use of your hedges.

Is a security deposit required to take a hedge in Aruban Florin (AWG)?

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 Aruban Florin (AWG) hedging contracts if the EUR/AWG 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 Aruban Florin (AWG) contracts open. Based on the review of your financial statements, lines without margin calls may sometimes be granted.

Are there carry points or discount points on forward contracts in Aruban Florin (AWG)?

It all depends on whether you are a buyer or seller of Aruban Florin (AWG) and against which currency you are trading the Aruban Florin. If we take an example against the euro: If you are a buyer of Aruban Florin (AWG) against the EUR, then there are déport points because the interest rate of the Aruban Florin (AWG) is inférieur to that of the EUR. Conversely, if you are a seller of Aruban Florin (AWG) against the EUR, then there are report points.

YOUR HEDGING NEED IN AWG
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