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If you are an importer or exporter who sells your products and services all around the globe, volatility in the currency market can add significant risk to your business's cash flow.
With an ever-evolving economic landscape and having to manage different country regulations, currency transactions, and integrations in various payment schemes, the complexities of running a business in today’s climate is no easy feat.
Forward Contracts are a powerful solution to protect your business from FX market risk, giving you and your business cost certainty in your international business transactions.
A Forward Contract is a “hedging” tool that does not require an upfront payment. When two parties sign a forward contract, they agree to trade a certain amount of one currency for another currency at a later predetermined date while setting a targeted exchange rate for the future trade at the same time.
Both Standard and Flexible risk management strategies can be applied for incoming and outgoing payments and can be booked for various time periods, most commonly for twelve months into the future.
The main benefit of utilizing a Forward Contract as an importer is to control and mitigate your exposure to foreign exchange volatility, especially within today's market. A Forward Contract will give you peace of mind on the cost of any of your overseas contracts. Even if the currency pair that you are dealing with when importing fluctuates between the time of the agreement, delivery of goods, and the payment of the invoice, your will be secured.
As an exporter, booking a Forward Contact to sell a currency allows you to secure a targeted FX rate to be used at a future date. This enables you to know how much in your home currency you will receive.
Booking a Forward Contract will make goods more attractive to buy as you are removing the currency volatility from the deal. This can allow you to be very competitive on your pricing strategy and at the same time, still secure your profit margins.
Learn more about how our solutions can help you retain your local customers and expand your international business. Contact one of our market experts for a free consultation and we will show you how foreign exchange currency risk management strategies can protect your business while increasing profits.
Open your account and stop paying exorbitant bank fees. We have the tools, expertise, and platform to help improve your cash flow and extend your overseas business footprint.
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