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Covering Foreign Exchange Risk in MGA - Malagasy Ariary

Drapeau Covering Foreign Exchange Risk in MGA - Malagasy Ariary

Foreign Exchange Risk in Malagasy Ariary (MGA)

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

Foreign Exchange Risk Coverage on Malagasy Ariary (MGA) with Mondial Change

Mondial Change allows you to cover your foreign exchange risk on Malagasy Ariary (MGA). Currently, foreign exchange risk coverage on Malagasy Ariary can only be achieved 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 exchanged 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 Malagasy Ariary (MGA).

To obtain accurate quotes on your Malagasy Ariary (MGA) hedges, we invite you to contact our trading desk.

Mondial Change Answers All Your Questions About Foreign Exchange Risk Coverage for Your Operations in Malagasy Ariary (MGA)

Are there minimum or maximum amounts for setting up hedges in Malagasy Ariary (MGA)?

The maximum amount of hedges in Malagasy Ariary (MGA) 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 less than 10,000 EUR (or equivalent in other currencies).

What is the maximum possible maturity for hedges in Malagasy Ariary (MGA)?

Generally, we do not offer hedges in Malagasy Ariary (MGA) 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 Malagasy Ariary (MGA)?

All fees related to setting up hedges in Malagasy Ariary (MGA) 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 Malagasy Ariary (MGA)?

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 Malagasy Ariary (MGA) hedging contracts if the EUR/MGA rate (or any other pair on which you have validated a hedge) deteriorates beyond the variation margin or beyond your OTM. In such cases, you must deposit funds as collateral to maintain your Malagasy Ariary (MGA) 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 Malagasy Ariary (MGA)?
The current interest rate on Malagasy Ariary (MGA) is "Currency Rate".

Are there carry points or discount points on NDF contracts in Malagasy Ariary (MGA)?

It all depends on whether you are a buyer or seller of Malagasy Ariary (MGA) and against which currency you are trading the Malagasy Ariary. For example, against the euro: If you are a buyer of Malagasy Ariary (MGA) against the EUR, there are déport points because the interest rate of Malagasy Ariary (MGA) is inférieur compared to that of the EUR. Conversely, if you are a seller of Malagasy Ariary (MGA) against the EUR, there are report points.

YOUR HEDGING NEED IN MGA
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