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Covering Foreign Exchange Risk in LAK - Lao Kip

Drapeau Covering Foreign Exchange Risk in LAK - Lao Kip

Foreign Exchange Risk Coverage on Lao Kip (LAK) with Mondial Change

Mondial Change allows you to cover your foreign exchange risk on the Lao Kip (LAK). The foreign exchange risk coverage on the Lao Kip 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. 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 cover your foreign exchange risk without any cash 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 the Lao Kip (LAK).

To obtain accurate quotes on your Lao Kip (LAK) hedges, we invite you to contact our trading desk.

Mondial Change answers all your questions about foreign exchange risk coverage for your operations in Lao Kip (LAK)

Are there minimum or maximum amounts to set up hedges in Lao Kip (LAK)?

The maximum amount of hedges in Lao Kip (LAK) 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. 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 Lao Kip (LAK)?

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

What are the setup fees for foreign exchange risk hedges in Lao Kip (LAK)?

All fees related to setting up hedges in Lao Kip (LAK) are included in the exchange rate communicated to you before the validation of your transaction. The hedge is taken 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 Lao Kip (LAK)?

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 Lao Kip (LAK) hedging contracts if the EUR/LAK 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 Lao Kip (LAK) 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 Lao Kip (LAK)?

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

YOUR HEDGING NEED IN LAK
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