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Hedge Foreign Exchange Risk in ISK - Icelandic Krona

Drapeau Hedge Foreign Exchange Risk in ISK - Icelandic Krona

Foreign Exchange Risk Hedging on Icelandic Krona (ISK) with Mondial Change

Mondial Change allows you to hedge your foreign exchange risk on the Icelandic Krona (ISK). The foreign exchange risk hedging on the Icelandic Krona is currently only possible 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 desk. A market expert advisor will assist you in setting up your foreign exchange hedges on the Icelandic Krona (ISK).

To obtain accurate quotes on your Icelandic Krona (ISK) hedges, we invite you to contact our trading desk.

Mondial Change answers all your questions about foreign exchange risk hedging for your operations in Icelandic Krona (ISK)

Are there minimum or maximum amounts to set up hedges in Icelandic Krona (ISK)?

The maximum amount of hedges in Icelandic Krona (ISK) 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 Icelandic Krona (ISK)?

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

What are the setup fees for hedging against foreign exchange risk in Icelandic Krona (ISK)?

All fees related to setting up hedges in Icelandic Krona (ISK) 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 Icelandic Krona (ISK)?

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 Icelandic Krona (ISK) hedging contracts if the EUR/ISK 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 Icelandic Krona (ISK) 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 Icelandic Krona (ISK)?

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

YOUR HEDGING NEED IN ISK
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