⇽ Currencies list

Hedging Foreign Exchange Risk in KWD - Kuwaiti Dinar

Drapeau Hedging Foreign Exchange Risk in KWD - Kuwaiti Dinar

Foreign Exchange Risk in Kuwaiti Dinar (KWD)

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

Hedging Foreign Exchange Risk on Kuwaiti Dinar (KWD) with Mondial Change

Mondial Change allows you to hedge your foreign exchange risk on the Kuwaiti Dinar (KWD). Currently, foreign exchange risk hedging on the Kuwaiti Dinar 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. 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 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 the Kuwaiti Dinar (KWD).

To obtain accurate quotes on your Kuwaiti Dinar (KWD) hedges, we invite you to contact our trading desk.

Mondial Change Answers All Your Questions on Foreign Exchange Risk Hedging for Your Kuwaiti Dinar (KWD) Transactions

Are there minimum or maximum amounts for setting up hedges in Kuwaiti Dinar (KWD)?

The maximum amount of hedges in Kuwaiti Dinar (KWD) 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 Kuwaiti Dinar (KWD)?

Generally, we do not offer hedges in Kuwaiti Dinar (KWD) 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 Kuwaiti Dinar (KWD)?

All fees related to setting up hedges in Kuwaiti Dinar (KWD) are included in the exchange rate communicated to you before the validation of 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 margin deposit required to take a hedge in Kuwaiti Dinar (KWD)?

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 margin deposit. Depending on your line conditions, margin calls may be triggered on your Kuwaiti Dinar (KWD) hedging contracts if the EUR/KWD 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 Kuwaiti Dinar (KWD) 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 Kuwaiti Dinar (KWD)?
The current interest rate on the Kuwaiti Dinar (KWD) is "Currency Rate".

Are there carry points or discount points on NDF contracts in Kuwaiti Dinar (KWD)?

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

YOUR HEDGING NEED IN KWD
Ellipse
Ellipse