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Hedge Foreign Exchange Risk in MYR - Malaysian Ringgit

Drapeau Hedge Foreign Exchange Risk in MYR - Malaysian Ringgit

The Foreign Exchange Risk in Malaysian Ringgit (MYR)

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

Hedging Foreign Exchange Risk on Malaysian Ringgit (MYR) with Mondial Change

Mondial Change allows you to hedge your foreign exchange risk on the Malaysian Ringgit (MYR). Currently, foreign exchange risk hedging on the Malaysian Ringgit 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 Malaysian Ringgit (MYR).

To obtain accurate quotes on your Malaysian Ringgit (MYR) hedges, we invite you to contact our trading desk.

Mondial Change Answers All Your Questions About Foreign Exchange Risk Hedging for Your Malaysian Ringgit (MYR) Operations

Are there minimum or maximum amounts for setting up hedges in Malaysian Ringgit (MYR)?

The maximum amount of hedges in Malaysian Ringgit (MYR) 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 Malaysian Ringgit (MYR)?

Generally, we do not offer hedges in Malaysian Ringgit (MYR) 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 hedges against foreign exchange risk in Malaysian Ringgit (MYR)?

All fees related to setting up hedges in Malaysian Ringgit (MYR) are included in the exchange rate communicated to you before validating 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 security deposit required to take a hedge in Malaysian Ringgit (MYR)?

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 Malaysian Ringgit (MYR) hedging contracts if the EUR/MYR 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 Malaysian Ringgit (MYR) 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 the Malaysian Ringgit (MYR)?
The current interest rate on the Malaysian Ringgit (MYR) is "Currency Rate".

Are there carry points or discount points on NDF contracts in Malaysian Ringgit (MYR)?

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

YOUR HEDGING NEED IN MYR
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