Hedging Currency Risk in THB - Thai Baht
Currency Risk in Thai Baht (THB)
When conducting transactions with Thailand, you may need to send or receive payments in Thai Baht. You are then naturally exposed to currency risk. Indeed, between the time you invoice your client in THB and the time you collect the THB, or conversely between the time your supplier issues their invoice in THB and you settle it in THB, the EUR/THB exchange rate may have moved in your favor or against you. To eliminate or minimize this risk of EUR/THB rate fluctuation (assuming your accounting currency is EUR) over a specified period, you can implement hedges on the EUR/THB. By locking in the EUR/THB rate in advance, you gain better visibility on your future cash flows in Thai Baht (THB) and secure your EUR/THB budget rate.
Currency Risk Hedging on Thai Baht (THB) with Mondial Change
Mondial Change allows you to hedge your currency risk on Thai Baht (THB). Currency risk hedging on Thai Baht can be done through fixed forward contracts or flexible forward contracts. It is also possible to hedge the currency risk on THB using currency options. You can use our hedging assistance tool to help 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 Thai Baht (THB).
Mondial Change Answers All Your Questions on Currency Risk Hedging for Your Operations in Thai Baht (THB)
Are there minimum or maximum amounts for setting up hedges in Thai Baht (THB)?
The maximum amount of hedges in Thai Baht (THB) 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 Thai Baht (THB)?
Generally, we do not offer hedges in Thai Baht (THB) 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 currency risk hedges in Thai Baht (THB)?
All fees related to the setup of hedges in Thai Baht (THB) are included in the exchange rate communicated to you before the validation of your transaction. The hedging is done by phone with a market operator. No fees are applied to the use of your hedges.
Is a security deposit required to take a hedge in Thai Baht (THB)?
This again 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 Thai Baht (THB) hedging contracts if the EUR/THB 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 Thai Baht (THB) contracts open. Based on the review of your financial statements, lines without margin calls may sometimes be granted.
Are there minimum amounts for early drawdowns on flexible forward contracts in Thai Baht (THB)?
No minimum amount for drawdowns on your flexible forward contracts in Thai Baht (THB). You can draw down autonomously on the online platform as many times as you wish between the contract initiation and the maturity date of your forward contract in Thai Baht (THB).
What happens at the maturity of my forward contract in Thai Baht (THB) if I haven't used the entirety of my contract?
In this case, there are two possibilities. You can sell the balance of your contract by paying any 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 Thai Baht (THB) contract by a few months to give you time to use it. However, Mondial Change and its partners reserve the right not to accept the extension of the contract maturity date.
What is the current interest rate on Thai Baht (THB)?
The current interest rate on Thai Baht (THB) is "Currency Rate".
Are there carry points or discount points on forward contracts in Thai Baht (THB)?
It all depends on whether you are a buyer or seller of Thai Baht (THB) and against which currency you are trading the Thai Baht. For example, against the euro: If you are a buyer of Thai Baht (THB) against EUR, then there are déport points because the interest rate of Thai Baht (THB) is inférieur to that of EUR. Conversely, if you are a seller of Thai Baht (THB) against EUR, then there are report points.