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Hedging Foreign Exchange Risk in IDR - Indonesian Rupiah

Drapeau Hedging Foreign Exchange Risk in IDR - Indonesian Rupiah

The Foreign Exchange Risk in Indonesian Rupiah (IDR)

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

Foreign Exchange Risk Hedging on Indonesian Rupiah (IDR) with Mondial Change

Mondial Change allows you to hedge your foreign exchange risk on Indonesian Rupiah (IDR). The foreign exchange risk hedging on Indonesian Rupiah 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. On the contract 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 exchanged 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 Indonesian Rupiah (IDR).

To obtain accurate quotes on your hedges in Indonesian Rupiah (IDR), we invite you to contact our trading desk.

Mondial Change Answers All Your Questions on Foreign Exchange Risk Hedging for Your Operations in Indonesian Rupiah (IDR)

Are there minimum or maximum amounts for setting up hedges in Indonesian Rupiah (IDR)?

The maximum amount of hedges in Indonesian Rupiah (IDR) 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. 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 Indonesian Rupiah (IDR)?

Generally, we do not offer hedges in Indonesian Rupiah (IDR) 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 Indonesian Rupiah (IDR)?

All fees related to setting up hedges in Indonesian Rupiah (IDR) are included in the exchange rate communicated to you before the validation of your operation. 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 Indonesian Rupiah (IDR)?

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 Indonesian Rupiah (IDR) if the EUR/IDR rate (or any other pair on which you have validated a hedge) deteriorates beyond the margin of variation or beyond your OTM. In such cases, you must deposit funds as collateral to keep your contracts in Indonesian Rupiah (IDR) open. Based on the review of your financial statements, lines without margin calls may sometimes be granted.

What is the current interest rate on Indonesian Rupiah (IDR)?
The current interest rate on Indonesian Rupiah (IDR) is "Currency Rate".

Are there carry points or discount points on NDF contracts in Indonesian Rupiah (IDR)?

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

YOUR HEDGING NEED IN IDR
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