Mondial Change allows you to hedge your foreign exchange risk on the Somali Shilling (SOS). Currently, foreign exchange risk coverage on the Somali Shilling 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 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 paid 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 the Somali Shilling (SOS).
To obtain accurate quotes on your Somali Shilling (SOS) hedges, we invite you to contact our trading desk.
Are there minimum or maximum amounts for setting up hedges in Somali Shilling (SOS)?
The maximum amount of hedges in Somali Shilling (SOS) 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. 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 Somali Shilling (SOS)?
What are the setup fees for foreign exchange risk hedges in Somali Shilling (SOS)?
All fees related to setting up hedges in Somali Shilling (SOS) are included in the exchange rate communicated to you before validating your transaction. The hedge is taken 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 Somali Shilling (SOS)?
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 Somali Shilling (SOS) hedging contracts if the EUR/SOS 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 Somali Shilling (SOS) contracts open. Based on the analysis of your financial statements, lines without margin calls can sometimes be granted.
Are there forward points or backward points on forward contracts in Somali Shilling (SOS)?
It all depends on whether you are a buyer or seller of Somali Shilling (SOS) and against which currency you are trading the Somali Shilling. If we take an example against the euro: If you are a buyer of Somali Shilling (SOS) against the EUR, then there are déport points because the interest rate of the Somali Shilling (SOS) is inférieur to that of the EUR. Conversely, if you are a seller of Somali Shilling (SOS) against the EUR, then there are report points.
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