When conducting transactions with Bahrain, you may need to send or receive payments in Burundian Franc. You are then naturally exposed to foreign exchange risk. Indeed, between the time you invoice your client in BIF and the time you collect the BIF, or conversely between the time your supplier issues their invoice in BIF and you settle this invoice in BIF, the EUR/BIF exchange rate may have moved in your favor or against you. It is to eliminate or minimize this risk of EUR/BIF exchange rate movement (assuming your accounting currency is EUR) over a determined period that you can implement hedges on the EUR/BIF. By locking in the EUR/BIF rate in advance, you gain better visibility on your future cash flows in Burundian Franc (BIF) and secure your EUR/BIF budget rate.
Mondial Change allows you to cover your foreign exchange risk on the Burundian Franc (BIF). Currently, foreign exchange risk coverage on the Burundian Franc can only be achieved 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 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 cover your foreign exchange risk without any cash flow being exchanged in the non-convertible currency. You can schedule a meeting with our trading desk. A market expert advisor will assist you in setting up your foreign exchange hedges on the Burundian Franc (BIF).
To obtain accurate quotes on your Burundian Franc (BIF) hedges, we invite you to contact our trading desk.
Are there minimum or maximum amounts for setting up hedges in Burundian Franc (BIF)?
The maximum amount of hedges in Burundian Franc (BIF) 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. As for minimum sizes, we generally do not take hedges for amounts less than 10,000 EUR (or equivalent in other currencies).
What is the maximum possible maturity for hedges in Burundian Franc (BIF)?
What are the setup fees for foreign exchange risk hedges in Burundian Franc (BIF)?
All fees related to setting up hedges in Burundian Franc (BIF) are included in the exchange rate communicated to you before the validation of your transaction. The hedge is taken 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 Burundian Franc (BIF)?
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 Burundian Franc (BIF) hedging contracts if the EUR/BIF 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 maintain your Burundian Franc (BIF) 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 Burundian Franc (BIF)?
It all depends on whether you are a buyer or seller of Burundian Franc (BIF) and against which currency you are trading the Burundian Franc. If we take an example against the euro: If you are a buyer of Burundian Franc (BIF) against the EUR, then there are déport points because the interest rate of the Burundian Franc (BIF) is inférieur to that of the EUR. Conversely, if you are a seller of Burundian Franc (BIF) against the EUR, then there are report points.
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