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Hedge Foreign Exchange Risk in RWF - Rwandan Franc

Drapeau Hedge Foreign Exchange Risk in RWF - Rwandan Franc

The Foreign Exchange Risk in Rwandan Franc (RWF)

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

Foreign Exchange Risk Coverage on Rwandan Franc (RWF) with Mondial Change

Mondial Change allows you to hedge your foreign exchange risk on the Rwandan Franc (RWF). The foreign exchange risk coverage on the Rwandan Franc can currently 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 flow being paid 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 Rwandan Franc (RWF).

To obtain accurate quotes on your Rwandan Franc (RWF) hedges, we invite you to contact our trading desk.

Mondial Change Answers All Your Questions on Foreign Exchange Risk Coverage for Your Rwandan Franc (RWF) Operations

Are there minimum or maximum amounts for setting up hedges in Rwandan Franc (RWF)?

The maximum amount of hedges in Rwandan Franc (RWF) 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 Rwandan Franc (RWF)?

Generally, we do not offer hedges in Rwandan Franc (RWF) 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 foreign exchange risk hedges in Rwandan Franc (RWF)?

All fees related to setting up hedges in Rwandan Franc (RWF) are included in the exchange rate communicated to you before validating your transaction. The hedging process is conducted 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 Rwandan Franc (RWF)?

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 Rwandan Franc (RWF) hedging contracts if the EUR/RWF 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 Rwandan Franc (RWF) 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 Rwandan Franc (RWF)?
The current interest rate on the Rwandan Franc (RWF) is "Currency Rate".

Are there carry points or discount points on NDF contracts in Rwandan Franc (RWF)?

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

YOUR HEDGING NEED IN RWF
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