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Hedge Foreign Exchange Risk in CUC - Cuban Convertible Peso

Foreign Exchange Risk Hedging on Cuban Convertible Peso (CUC) with Mondial Change

Mondial Change allows you to hedge your foreign exchange risk on the Cuban Convertible Peso (CUC). Currently, foreign exchange risk hedging on the Cuban Convertible 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 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 room. An expert market advisor will assist you in setting up your foreign exchange hedges on the Cuban Convertible Peso (CUC).

To obtain accurate quotes on your hedges in Cuban Convertible Peso (CUC), we invite you to contact our trading room.

Mondial Change Answers All Your Questions on Foreign Exchange Risk Hedging for Your Operations in Cuban Convertible Peso (CUC)

Are there minimum or maximum amounts for setting up hedges in Cuban Convertible Peso (CUC)?

The maximum amount of hedges in Cuban Convertible Peso (CUC) 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 Cuban Convertible Peso (CUC)?

Generally, we do not offer hedges in Cuban Convertible Peso (CUC) 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 foreign exchange risk hedging in Cuban Convertible Peso (CUC)?

All fees related to setting up hedges in Cuban Convertible Peso (CUC) are included in the exchange rate communicated to you before validating your operation. The hedging is done over the 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 Cuban Convertible Peso (CUC)?

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 hedging contracts in Cuban Convertible Peso (CUC) if the EUR/CUC 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 contracts in Cuban Convertible Peso (CUC) open. Based on the review of your financial statements, lines without margin calls can sometimes be granted.

Are there forward points or backward points on forward contracts in Cuban Convertible Peso (CUC)?

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

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