When conducting transactions with the United Arab Emirates, you may need to send or receive payments in United Arab Emirates Dirham. You are then naturally exposed to foreign exchange risk. Indeed, between the time you invoice your client in AED and the time you collect the AED, or conversely between the time your supplier issues an invoice in AED and you settle that invoice in AED, the EUR/AED rate may have moved in your favor or against you. To eliminate or minimize this risk of EUR/AED rate movement (assuming your accounting currency is EUR) over a specified period, you can implement hedges on the EUR/AED. By locking in the EUR/AED rate in advance, you gain better visibility on your future cash flows in United Arab Emirates Dirham (AED) and secure your EUR/AED budget rate.
Mondial Change allows you to cover your foreign exchange risk on the United Arab Emirates Dirham (AED). Foreign exchange risk coverage on the United Arab Emirates Dirham can be achieved through fixed forward contracts or flexible forward contracts. It is also possible to cover the foreign exchange risk on AED 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 consultation with our trading desk. An expert market advisor will assist you in setting up your foreign exchange hedges on the United Arab Emirates Dirham (AED).
To obtain accurate quotes on your hedges in United Arab Emirates Dirham (AED), we invite you to contact our trading desk.
Are there minimum or maximum amounts for setting up hedges in United Arab Emirates Dirham (AED)?
The maximum amount of hedges in United Arab Emirates Dirham (AED) that you can validate primarily depends on the size of the forward exchange line granted to you. The granted line conditions 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 United Arab Emirates Dirham (AED)?
What are the setup fees for foreign exchange risk hedges in United Arab Emirates Dirham (AED)?
All fees related to setting up hedges in United Arab Emirates Dirham (AED) are included in the exchange rate communicated to you before validating your transaction. 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 United Arab Emirates Dirham (AED)?
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 United Arab Emirates Dirham (AED) if the EUR/AED 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 United Arab Emirates Dirham (AED) open. Based on your financial statements, lines without margin calls may sometimes be granted.
Are there minimum amounts for early drawdowns on flexible forward contracts in United Arab Emirates Dirham (AED)?
No minimum amount for drawdowns on your flexible forward contracts in United Arab Emirates Dirham (AED). You can draw down independently on the online platform as many times as you wish between the contract initiation and the maturity date of your forward contract in United Arab Emirates Dirham (AED).
What happens if at the maturity of my forward contract in United Arab Emirates Dirham (AED) I have not 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 contract in United Arab Emirates Dirham (AED) by a few months to give you time to use it. Mondial Change and its partners, however, reserve the right not to accept postponing the contract's maturity date.
What is the current interest rate on the United Arab Emirates Dirham (AED)?
The current interest rate on the United Arab Emirates Dirham (AED) is "Currency Rate".
Are there carry points or discount points on forward contracts in United Arab Emirates Dirham (AED)?
It all depends on whether you are a buyer or seller of United Arab Emirates Dirham (AED) and against which currency you are trading the United Arab Emirates Dirham. For example, against the euro: If you are a buyer of United Arab Emirates Dirham (AED) against the EUR, there are report points because the interest rate of the United Arab Emirates Dirham (AED) is supérieur to that of the EUR. Conversely, if you are a seller of United Arab Emirates Dirham (AED) against the EUR, there are déport points.
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