Mondial Change allows you to hedge your foreign exchange risk on the Cuban Peso (CUP). The foreign exchange risk hedging on the Cuban Peso 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 being paid 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 Cuban Peso (CUP).
To obtain accurate quotes on your Cuban Peso (CUP) hedges, we invite you to contact our trading desk.
Are there minimum or maximum amounts to set up hedges in Cuban Peso (CUP)?
The maximum amount of hedges in Cuban Peso (CUP) that you can validate primarily depends on the size of the forward exchange line granted to you. The granted line conditions 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 Peso (CUP)?
What are the setup fees for hedging against foreign exchange risk in Cuban Peso (CUP)?
All fees related to the setup of hedges in Cuban Peso (CUP) 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 Cuban Peso (CUP)?
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 Cuban Peso (CUP) hedging contracts if the EUR/CUP 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 Cuban Peso (CUP) 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 Cuban Peso (CUP)?
It all depends on whether you are a buyer or seller of Cuban Peso (CUP) and against which currency you are trading the Cuban Peso. If we take an example against the euro: If you are a buyer of Cuban Peso (CUP) against the EUR, then there are déport points because the interest rate of the Cuban Peso (CUP) is inférieur to that of the EUR. Conversely, if you are a seller of Cuban Peso (CUP) against the EUR, then there are report points.
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