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Hedging Foreign Exchange Risk in KZT - Kazakh Tenge

Drapeau Hedging Foreign Exchange Risk in KZT - Kazakh Tenge

The Foreign Exchange Risk in Kazakh Tenge (KZT)

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

Hedging Foreign Exchange Risk on Kazakh Tenge (KZT) with Mondial Change

Mondial Change allows you to hedge your foreign exchange risk on Kazakh Tenge (KZT). Currently, hedging foreign exchange risk on Kazakh Tenge 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 hedge 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 Kazakh Tenge (KZT).

To obtain accurate quotes on your Kazakh Tenge (KZT) hedges, we invite you to contact our trading desk.

Mondial Change Answers All Your Questions on Foreign Exchange Risk Hedging for Your Operations in Kazakh Tenge (KZT)

Are there minimum or maximum amounts for setting up hedges in Kazakh Tenge (KZT)?

The maximum amount of hedges in Kazakh Tenge (KZT) 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 Kazakh Tenge (KZT)?

Generally, we do not offer hedges in Kazakh Tenge (KZT) 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 Kazakh Tenge (KZT)?

All fees related to the setup of hedges in Kazakh Tenge (KZT) are included in the exchange rate communicated to you before validating 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 Kazakh Tenge (KZT)?

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 Kazakh Tenge (KZT) hedging contracts if the EUR/KZT 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 Kazakh Tenge (KZT) contracts open. Based on the review of your financial statements, lines without margin calls may sometimes be granted.

What is the current interest rate on Kazakh Tenge (KZT)?
The current interest rate on Kazakh Tenge (KZT) is "Currency Rate".

Are there carry points or discount points on NDF contracts in Kazakh Tenge (KZT)?

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

YOUR HEDGING NEED IN KZT
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