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Hedging Foreign Exchange Risk in GEL - Georgian Lari

Drapeau Hedging Foreign Exchange Risk in GEL - Georgian Lari

Foreign Exchange Risk Hedging on Georgian Lari (GEL) with Mondial Change

Mondial Change allows you to hedge your foreign exchange risk on the Georgian Lari (GEL). Currently, foreign exchange risk hedging on the Georgian Lari 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'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 Georgian Lari (GEL).

To obtain accurate quotes on your hedges in Georgian Lari (GEL), we invite you to contact our trading desk.

Mondial Change answers all your questions about foreign exchange risk hedging for your operations in Georgian Lari (GEL)

Are there minimum or maximum amounts for setting up hedges in Georgian Lari (GEL)?

The maximum amount of hedges in Georgian Lari (GEL) 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 Georgian Lari (GEL)?

Generally, we do not offer hedges in Georgian Lari (GEL) 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 foreign exchange risk hedging in Georgian Lari (GEL)?

All fees related to the setup of hedges in Georgian Lari (GEL) are included in the exchange rate communicated to you before the validation of your transaction. The hedging is done by phone with an operator from the trading desk. No fees are applied to the use of your hedges.

Is a security deposit required to take a hedge in Georgian Lari (GEL)?

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 Georgian Lari (GEL) if the EUR/GEL 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 contracts in Georgian Lari (GEL) 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 Georgian Lari (GEL)?

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

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