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Exchange Rate Risk

  • Currency Spot

    A Currency spot operation is purchase or sale of one currency for another currency subject to a rate agreed in advance by the participating parties. Settlement of the transaction takes place as standard with a spot value date, i.e. two working days after the date the transaction is concluded.

  • Currency Forward

    The Currency forward product is purchase or sale of one currency for another currency subject to a rate agreed in advance by the participating parties. Settlement of the transaction takes place with a forward value date (i.e. longer than 2 working days from the date the transaction is agreed).

  • Currency Swap

    A Currency swap (or also Foreign exchange swap) operation is a combination of two transactions, spot and forward. This product consists in sale of one currency for another currency with settlement no later than on the spot value date and buyback/resale with settlement on the forward value date. Both transactions are concluded at the same moment.

  • Currency Option

    The Currency option product represents the right (option) to purchase or sell a specific amount of one currency for another currency subject to the foreign exchange rate agreed by the participants in advance on the agreed date.

  • Cross Currency Swap

    Cross Currency Swap is an agreement on exchange of principals of two currencies and the interest costs relating to these. Party A undertakes to purchase funds in currency 1 from party B for a certain amount of funds in currency 2, on a fixed date and also undertakes to sell back the same amount of funds in currency 1 for a certain amount of funds in currency 2 at the same exchange rate and on a later fixed date, no later however than within one year from conclusion of the transaction. Over the course of the transaction, the parties mutually pay interest on the currencies, which they purchased from each other at the start of the transaction.

  • Forward Corridor

    Forward Corridor allows the client to implement a currency forward for an agreed nominal amount for a more advantageous exchange rate than usual for zero initial costs.

  • Mark-to-market Forward

    Mark-to-Market Forward allows the client to secure himself or herself against exchange rate risk and at the same time, limit the maximum risk of negative revaluation in the event of inauspicious development. The parties to the transaction agree on a forward exchange rate and on a rate limiting the maximum risk of negative revaluation.

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