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Hedging Foreign Exchange Risk in UYU - Uruguayan Peso

Drapeau Hedging Foreign Exchange Risk in UYU - Uruguayan Peso

The Foreign Exchange Risk in Uruguayan Peso (UYU)

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

Hedging Foreign Exchange Risk on the Uruguayan Peso (UYU) with Mondial Change

Mondial Change allows you to hedge your foreign exchange risk on the Uruguayan Peso (UYU). The foreign exchange risk hedging on the Uruguayan Peso 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 room. A market expert advisor will assist you in setting up your currency hedges on the Uruguayan Peso (UYU).

To obtain accurate quotes on your hedges in Uruguayan Peso (UYU), we invite you to contact our trading room.

Mondial Change Answers All Your Questions on Foreign Exchange Risk Hedging for Your Operations in Uruguayan Peso (UYU)

Are there minimum or maximum amounts to set up hedges in Uruguayan Peso (UYU)?

The maximum amount of hedges in Uruguayan Peso (UYU) 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 Uruguayan Peso (UYU)?

Generally, we do not offer hedges in Uruguayan Peso (UYU) 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 hedges against foreign exchange risk in Uruguayan Peso (UYU)?

All fees related to setting up hedges in Uruguayan Peso (UYU) are included in the exchange rate communicated to you before validating your operation. The hedging is done by phone with a trading room operator. No fees are applied to the use of your hedges.

Is a security deposit required to take a hedge in Uruguayan Peso (UYU)?

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 Uruguayan Peso (UYU) if the EUR/UYU 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 keep your contracts in Uruguayan Peso (UYU) open. Based on the review of your financial statements, lines without margin calls can sometimes be granted.

What is the current interest rate on the Uruguayan Peso (UYU)?
The current interest rate on the Uruguayan Peso (UYU) is "Currency Rate".

Are there carry points or discount points on NDF contracts in Uruguayan Peso (UYU)?

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

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