When you conduct transactions with Bahrain, you may need to send payments or receive payments in Brunei Dollar. You are then naturally exposed to foreign exchange risk. Indeed, between the time you invoice your client in BND and the time you collect the BND or conversely between the time your supplier issues their invoice in BND and you settle this invoice in BND, the EUR/BND rate may have moved in your favor or against you. It is to eliminate or minimize this risk of EUR/BND rate movement (assuming your accounting currency is EUR) over a determined period that you can implement hedges on the EUR/BND. By locking in the EUR/BND rate in advance, you gain better visibility on your future cash flows in Brunei Dollar (BND) and secure your EUR/BND budget rate.
Mondial Change allows you to cover your foreign exchange risk on the Brunei Dollar (BND). The foreign exchange risk coverage on the Brunei Dollar 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 cover your foreign exchange risk without any cash flow in the non-convertible currency. You can schedule a meeting with our trading room. A market expert advisor will assist you in setting up your foreign exchange hedges on the Brunei Dollar (BND).
To obtain accurate quotes on your Brunei Dollar (BND) hedges, we invite you to contact our trading room.
Are there minimum or maximum amounts to set up hedges in Brunei Dollar (BND)?
The maximum amount of hedges in Brunei Dollar (BND) 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 Brunei Dollar (BND)?
What are the setup fees for foreign exchange risk hedges in Brunei Dollar (BND)?
All fees related to setting up hedges in Brunei Dollar (BND) are included in the exchange rate communicated to you before the validation of your transaction. 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 Brunei Dollar (BND)?
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 Brunei Dollar (BND) hedging contracts if the EUR/BND rate (or any other pair on which you have validated a hedge) deteriorates beyond the margin of variation or beyond your OTM. In this case, you must deposit funds as collateral to keep your Brunei Dollar (BND) contracts open. Based on the review of your financial statements, lines without margin calls can sometimes be granted.
Are there carry points or discount points on forward contracts in Brunei Dollar (BND)?
It all depends on whether you are a buyer or seller of Brunei Dollar (BND) and against which currency you are trading the Brunei Dollar. If we take an example against the euro: If you are a buyer of Brunei Dollar (BND) against the EUR, then there are déport points because the interest rate of the Brunei Dollar (BND) is inférieur to that of the EUR. Conversely, if you are a seller of Brunei Dollar (BND) against the EUR, then there are report points.
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