Hedge Foreign Exchange Risk in INR - Indian Rupee
The Foreign Exchange Risk in Indian Rupee (INR)
When conducting transactions with India, you may need to send or receive payments in Indian Rupee. You are then naturally exposed to foreign exchange risk. Indeed, between the time you invoice your client in INR and the time you collect the INR, or conversely between the time your supplier issues their invoice in INR and you settle this invoice in INR, the EUR/INR rate may have moved in your favor or against you. To eliminate or minimize this risk of EUR/INR rate movement (assuming your accounting currency is EUR) over a determined period, you can implement hedges on the EUR/INR. By locking in the EUR/INR rate in advance, you gain better visibility on your future cash flows in Indian Rupee (INR) and secure your EUR/INR budget rate.
Hedging Foreign Exchange Risk on Indian Rupee (INR) with Mondial Change
Mondial Change allows you to hedge your foreign exchange risk on Indian Rupee (INR). The foreign exchange risk hedging on Indian Rupee can be done through fixed forward contracts or flexible forward contracts. It is also possible to hedge the foreign exchange risk on INR using currency options. You can use our hedging assistance tool which will help you select the most suitable hedging strategy for your needs. You can also schedule a consultation with our trading desk. An expert market advisor will assist you in setting up your foreign exchange hedges on Indian Rupee (INR).
Mondial Change Answers All Your Questions on Foreign Exchange Risk Hedging for Your Indian Rupee (INR) Operations
Are there minimum or maximum amounts for setting up hedges in Indian Rupee (INR)?
The maximum amount of hedges in Indian Rupee (INR) 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 Indian Rupee (INR)?
Generally, we do not offer hedges in Indian Rupee (INR) 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 hedges against foreign exchange risk in Indian Rupee (INR)?
All fees related to setting up hedges in Indian Rupee (INR) 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 Indian Rupee (INR)?
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 Indian Rupee (INR) hedging contracts if the EUR/INR 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 Indian Rupee (INR) contracts open. Based on the review of your financial statements, lines without margin calls can sometimes be granted.
Are there minimum amounts for early drawdowns on flexible forward contracts in Indian Rupee (INR)?
No minimum amount for drawdowns on your flexible forward contracts in Indian Rupee (INR). You can draw down autonomously on the online platform as many times as you wish between the contract initiation and the maturity date of your forward contract in Indian Rupee (INR).
What happens if at the maturity of my forward contract in Indian Rupee (INR) I have not used the entirety of my contract?
In this case, there are two possibilities. You can sell the balance of your contract by paying the potential exchange loss if the exchange rate at the time of resale is less favorable than your contract rate. Alternatively, you can request Mondial Change to extend your Indian Rupee (INR) contract by a few months to give you time to use it. Mondial Change and its partners reserve the right not to accept extending the contract maturity date.
What is the current interest rate on Indian Rupee (INR)?
The current interest rate on Indian Rupee (INR) is "Currency Rate".
Are there carry points or discount points on forward contracts in Indian Rupee (INR)?
It all depends on whether you are a buyer or seller of Indian Rupee (INR) and against which currency you are trading the Indian Rupee. Taking an example against the euro: If you are a buyer of Indian Rupee (INR) against the EUR, there are report points because the interest rate of the Indian Rupee (INR) is supérieur to that of the EUR. Conversely, if you are a seller of Indian Rupee (INR) against the EUR, there are déport points.