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Hedging Foreign Exchange Risk in KPW - North Korean Won

Hedging Foreign Exchange Risk on North Korean Won (KPW) with Mondial Change

Mondial Change enables you to hedge your foreign exchange risk on North Korean Won (KPW). Currently, foreign exchange risk hedging on North Korean Won can only be conducted 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 North Korean Won (KPW).

To obtain accurate quotes on your hedges in North Korean Won (KPW), we invite you to contact our trading desk.

Mondial Change Answers All Your Questions on Foreign Exchange Risk Hedging for Your Operations in North Korean Won (KPW)

Are there minimum or maximum amounts for setting up hedges in North Korean Won (KPW)?

The maximum amount of hedges in North Korean Won (KPW) that you can validate primarily depends on the size of the forward exchange line granted to you. The granted line conditions depend on the analysis 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 North Korean Won (KPW)?

Generally, we do not offer hedges in North Korean Won (KPW) for maturities exceeding 24 months, but this can be reviewed 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 North Korean Won (KPW)?

All fees related to setting up hedges in North Korean Won (KPW) are included in the exchange rate communicated to you before the validation of your transaction. The hedging is conducted over the 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 North Korean Won (KPW)?

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 North Korean Won (KPW) if the EUR/KPW 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 keep your contracts in North Korean Won (KPW) open. Based on the analysis of your financial statements, lines without margin calls can sometimes be granted.

Are there carry points or discount points on forward contracts in North Korean Won (KPW)?

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

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