Hedge Foreign Exchange Risk in NZD - New Zealand Dollar
Foreign Exchange Risk in New Zealand Dollar (NZD)
When conducting transactions with New Zealand, you may need to send or receive payments in New Zealand Dollar. You are then naturally exposed to foreign exchange risk. Indeed, between the time you invoice your client in NZD and the time you collect the NZD, or conversely between the time your supplier issues their invoice in NZD and you settle this invoice in NZD, the EUR/NZD rate may have moved in your favor or against you. It is to eliminate or minimize this risk of EUR/NZD rate movement (assuming your accounting currency is EUR) over a determined period that you can implement hedges on the EUR/NZD. By locking in the EUR/NZD rate in advance, you gain better visibility on your future cash flows in New Zealand Dollar (NZD) and secure your EUR/NZD budget rate.
Hedging Foreign Exchange Risk on New Zealand Dollar (NZD) with Mondial Change
Mondial Change allows you to hedge your foreign exchange risk on the New Zealand Dollar (NZD). The foreign exchange risk hedging on the New Zealand Dollar can be done through fixed forward contracts or flexible forward contracts. It is also possible to hedge the NZD risk using currency options. You can use our hedging assistance tool which will help you select the most suitable hedging strategy for your needs. You can also schedule a meeting with our trading desk. An expert market advisor will assist you in setting up your currency hedges on the New Zealand Dollar (NZD).
Mondial Change Answers All Your Questions on Foreign Exchange Risk Hedging for Your New Zealand Dollar (NZD) Operations
Are there minimum or maximum amounts for setting up hedges in New Zealand Dollar (NZD)?
The maximum amount of hedges in New Zealand Dollar (NZD) that 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 below 10,000 EUR (or equivalent in other currencies).
What is the maximum possible maturity for hedges in New Zealand Dollar (NZD)?
Generally, we do not offer hedges in New Zealand Dollar (NZD) 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 New Zealand Dollar (NZD)?
All fees related to setting up hedges in New Zealand Dollar (NZD) 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 New Zealand Dollar (NZD)?
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 the conditions of your line, margin calls may be triggered on your New Zealand Dollar (NZD) hedging contracts if the EUR/NZD rate (or any other pair on which you have validated a hedge) deteriorates beyond the margin of variation or beyond your OTM. In this case, you must deposit funds as collateral to keep your New Zealand Dollar (NZD) contracts open. Based on the review of your financial statements, lines without margin calls can sometimes be granted.
Are there minimum amounts for early drawdowns on flexible forward contracts in New Zealand Dollar (NZD)?
No minimum amount for drawdowns on your flexible forward contracts in New Zealand Dollar (NZD). You can draw down independently on the online platform as many times as you wish between the contract initiation and the maturity date of your forward contract in New Zealand Dollar (NZD).
What happens if at the maturity of my forward contract in New Zealand Dollar (NZD) I have not used the entirety of my contract?
In this case, there are two possibilities. You can sell the balance of your contract by paying the potential exchange loss if the exchange rate at the time of resale is less favorable than your contract rate. Alternatively, you can request Mondial Change to extend your New Zealand Dollar (NZD) contract by a few months to give you time to use it. Mondial Change and its partners, however, reserve the right not to accept postponing the contract maturity date.
What is the current interest rate on the New Zealand Dollar (NZD)?
The current interest rate on the New Zealand Dollar (NZD) is "Currency Rate".
Are there carry points or discount points on forward contracts in New Zealand Dollar (NZD)?
It all depends on whether you are a buyer or seller of New Zealand Dollar (NZD) and against which currency you are trading the New Zealand Dollar. If we take an example against the euro: If you are a buyer of New Zealand Dollar (NZD) against the EUR, then there are report points because the interest rate of the New Zealand Dollar (NZD) is supérieur compared to that of the EUR. Conversely, if you are a seller of New Zealand Dollar (NZD) against the EUR, then there are déport points.