⇽ Currencies list

Hedge Foreign Exchange Risk in PEN - Peruvian Sol

Drapeau Hedge Foreign Exchange Risk in PEN - Peruvian Sol

Foreign Exchange Risk in Peruvian Sol (PEN)

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

Foreign Exchange Risk Hedging on Peruvian Sol (PEN) with Mondial Change

Mondial Change allows you to hedge your foreign exchange risk on Peruvian Sol (PEN). Currently, foreign exchange risk hedging on Peruvian Sol can 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 Peruvian Sol (PEN).

To obtain accurate quotes on your hedges in Peruvian Sol (PEN), we invite you to contact our trading desk.

Mondial Change Answers All Your Questions on Foreign Exchange Risk Hedging for Your Operations in Peruvian Sol (PEN)

Are there minimum or maximum amounts to set up hedges in Peruvian Sol (PEN)?

The maximum amount of hedges in Peruvian Sol (PEN) 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 Peruvian Sol (PEN)?

Generally, we do not offer hedges in Peruvian Sol (PEN) 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 hedging against foreign exchange risk in Peruvian Sol (PEN)?

All fees related to setting up hedges in Peruvian Sol (PEN) are included in the exchange rate communicated to you before validating your transaction. The hedging is done 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 Peruvian Sol (PEN)?

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 Peruvian Sol (PEN) if the EUR/PEN 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 Peruvian Sol (PEN) open. Based on the review of your financial statements, lines without margin calls can sometimes be granted.

What is the current interest rate on Peruvian Sol (PEN)?
The current interest rate on Peruvian Sol (PEN) is "Currency Rate".

Are there carry points or discount points on NDF contracts in Peruvian Sol (PEN)?

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

YOUR HEDGING NEED IN PEN
Ellipse
Ellipse