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Hedge Foreign Exchange Risk in SBD - Solomon Islands Dollar

Drapeau Hedge Foreign Exchange Risk in SBD - Solomon Islands Dollar

Foreign Exchange Risk Coverage on the Solomon Islands Dollar (SBD) with Mondial Change

Mondial Change allows you to hedge your foreign exchange risk on the Solomon Islands Dollar (SBD). The foreign exchange risk coverage on the Solomon Islands Dollar can currently 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 room. A market expert advisor will assist you in setting up your foreign exchange hedges on the Solomon Islands Dollar (SBD).

To obtain accurate quotes on your hedges in Solomon Islands Dollar (SBD), we invite you to contact our trading room.

Mondial Change answers all your questions on foreign exchange risk coverage for your operations in Solomon Islands Dollar (SBD)

Are there minimum or maximum amounts for setting up hedges in Solomon Islands Dollar (SBD)?

The maximum amount of hedges in Solomon Islands Dollar (SBD) 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. As for 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 Solomon Islands Dollar (SBD)?

Generally, we do not offer hedges in Solomon Islands Dollar (SBD) for maturities exceeding 24 months, but this can be considered on a case-by-case basis. Please contact our trading room for a personalized study of your needs.

What are the setup fees for foreign exchange risk hedges in Solomon Islands Dollar (SBD)?

All fees related to the setup of hedges in Solomon Islands Dollar (SBD) are included in the exchange rate communicated to you before the validation of your operation. The hedge is taken by phone with a trading room operator. No fees are applied to the use of your hedges.

Is a margin deposit required to take a hedge in Solomon Islands Dollar (SBD)?

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 margin deposit. Depending on your line conditions, margin calls may be triggered on your hedging contracts in Solomon Islands Dollar (SBD) if the EUR/SBD 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 Solomon Islands Dollar (SBD) 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 Solomon Islands Dollar (SBD)?

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

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