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Hedge Foreign Exchange Risk in MZN - Mozambican Metical

Drapeau Hedge Foreign Exchange Risk in MZN - Mozambican Metical

Foreign Exchange Risk Hedging on Mozambican Metical (MZN) with Mondial Change

Mondial Change allows you to hedge your foreign exchange risk on the Mozambican Metical (MZN). Currently, foreign exchange risk hedging on the Mozambican Metical 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 hedge your foreign exchange risk without any cash flow being transferred 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 Mozambican Metical (MZN).

To obtain accurate quotes on your hedges in Mozambican Metical (MZN), we invite you to contact our trading desk.

Mondial Change answers all your questions on foreign exchange risk hedging for your operations in Mozambican Metical (MZN)

Are there minimum or maximum amounts for setting up hedges in Mozambican Metical (MZN)?

The maximum amount of hedges in Mozambican Metical (MZN) 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. 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 Mozambican Metical (MZN)?

Generally, we do not offer hedges in Mozambican Metical (MZN) 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 Mozambican Metical (MZN)?

All fees related to setting up hedges in Mozambican Metical (MZN) are included in the exchange rate communicated to you before the validation of 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 Mozambican Metical (MZN)?

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 hedging contracts in Mozambican Metical (MZN) if the EUR/MZN 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 contracts in Mozambican Metical (MZN) 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 Mozambican Metical (MZN)?

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

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