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Covering Foreign Exchange Risk in GTQ - Guatemalan Quetzal

Drapeau Covering Foreign Exchange Risk in GTQ - Guatemalan Quetzal

Foreign Exchange Risk in Guatemalan Quetzal (GTQ)

When conducting transactions with Guatemala, you may need to send payments or receive payments in Guatemalan Quetzal. You are then naturally exposed to foreign exchange risk. Indeed, between the time you invoice your client in GTQ and the time you collect the GTQ, or conversely between the time your supplier issues their invoice in GTQ and you settle this invoice in GTQ, the EUR/GTQ exchange rate may have moved in your favor or against you. It is to eliminate or minimize this risk of EUR/GTQ exchange rate movement (assuming your accounting currency is EUR) over a determined period that you can set up hedges on the EUR/GTQ. By locking in the EUR/GTQ rate in advance, you gain better visibility on your future cash flows in Guatemalan Quetzal (GTQ) and secure your EUR/GTQ budget rate.

Foreign Exchange Risk Coverage on Guatemalan Quetzal (GTQ) with Global Exchange

Global Exchange allows you to cover your foreign exchange risk on the Guatemalan Quetzal (GTQ). Currently, foreign exchange risk coverage on the Guatemalan Quetzal 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. On 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 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 Guatemalan Quetzal (GTQ).

To obtain accurate quotes on your Guatemalan Quetzal (GTQ) hedges, we invite you to contact our trading desk.

Global Exchange Answers All Your Questions on Foreign Exchange Risk Coverage for Your Operations in Guatemalan Quetzal (GTQ)

Are there minimum or maximum amounts for setting up hedges in Guatemalan Quetzal (GTQ)?

The maximum amount of hedges in Guatemalan Quetzal (GTQ) 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 below 10,000 EUR (or equivalent in other currencies).

What is the maximum possible maturity for hedges in Guatemalan Quetzal (GTQ)?

Generally, we do not offer hedges in Guatemalan Quetzal (GTQ) for maturities exceeding 24 months, but this can be reviewed on a case-by-case basis. Please contact our trading desk for a personalized assessment of your needs.

What are the setup fees for foreign exchange risk hedges in Guatemalan Quetzal (GTQ)?

All fees related to setting up hedges in Guatemalan Quetzal (GTQ) are included in the exchange rate communicated to you before validating 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 Guatemalan Quetzal (GTQ)?

Again, this depends on the conditions of your forward exchange line. Thanks to its network of partners, Global Exchange generally manages to obtain forward exchange lines without an initial security deposit. Depending on your line conditions, margin calls may be triggered on your Guatemalan Quetzal (GTQ) hedging contracts if the EUR/GTQ 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 Guatemalan Quetzal (GTQ) contracts open. Based on the review of your financial statements, lines without margin calls can sometimes be granted.

What is the current interest rate on the Guatemalan Quetzal (GTQ)?
The current interest rate on the Guatemalan Quetzal (GTQ) is "Currency Rate".

Are there carry points or discount points on NDF contracts in Guatemalan Quetzal (GTQ)?

It all depends on whether you are a buyer or seller of Guatemalan Quetzal (GTQ) and against which currency you are trading the Guatemalan Quetzal. For example, against the euro: If you are a buyer of Guatemalan Quetzal (GTQ) against the EUR, there are report points because the interest rate of the Guatemalan Quetzal (GTQ) is supérieur to that of the EUR. Conversely, if you are a seller of Guatemalan Quetzal (GTQ) against the EUR, there are déport points.

YOUR HEDGING NEED IN GTQ
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