• FX Forward

    Exchange currencies on required future date at guaranteed exchange rate.

Hedging

Reduces risk of exchange rate volatility.

Many currencies

Transactions can be closed in all currencies shown in KB Exchange List.

Several forms

You can fix the exchange rate for future outgoing foreign payments and documentary transactions.

Confirmation

Allows you to review parameters of your trades.

Why KB?

Individual attention

Contact our dedicated Sales dealers directly.

Anywhere

Trade from wherever you are - via telephone or on the Internet.

Trade with professionals

A team of KB specialists will propose suitable hedging strategy and assistance.

How to get this product?

Select a branch, leave your contact information – we will call you back.

At a branch

Leave it all up to us. Leave your contact information – we will call you back.

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Intended for

Entrepreneurs and legal entities, including municipalities – domiciled in the Czech Republic and abroad.

Product purpose

Hedge exchange rate volatility (currency risk).

About FX Forward

  • By entering into FX Forward contract the parties agree to purchase and sell one currency for another at an exchange rate agreed by the transaction parties in advance on trade date
  • Transaction settlement with a forward value date (i.e. more than 2 working days from the trade date)
  • Currency forwards are available in all currencies listed in the KB Exchange List
  • Exchange rates can be fixed also for future outgoing foreign payments, documentary collection or documentary letter of credit transactions

You might also like to know

  • Transaction is concluded via telephone with Sales dealer or on the Internet via the KB eTrading application
  • We will send Transaction confirmation of each transaction for verification purposes. The confirmation lists key transaction parameters; for KB eTrading transactions, the parameters of executed transactions are archived directly in the application.
  • We have a team of experienced professionals who can propose suitable hedging strategies and respond quickly to market developments

Permitted modifications

  • Non-deliverable forward
    • Non-deliverable forward is a currency forward, where the actual exchange of amounts in purchased/sold currencies does not take place
    • Counterparties agree on settlement in one of the two currencies of the relevant currency pair – so–called reference currency
    • One or two working days (depending on the given currency) prior to the transaction settlement the settlement amount in reference currency is calculated based on the difference between current spot exchange rate and previously agreed forward exchange rate
    • Net position is then settled in the reference currency – by the short (by the party in disadvantageous position)
  • Par forward
    • Par forward is a set of currency forwards that differ in a single parameter – maturity date

Important information for you

Risk

  • Potential profit or loss from transactions denominated in foreign currencies affected by exchange rate fluctuations
  • In theory, neither profits nor losses are limited in any way

Example of risk

Please review our model transaction:

  • Client enters into a currency forward with its bank
  • Client sells EUR 1 million, buying CZK, with transaction settlement in 1 month
  • Agreed exchange rate: 27.950
    • As of the settlement date, the current spot exchange rate is 28.000.
      • If executed as speculation, the client incurred a loss of CZK 50,000
      • If executed as hedging, the client views the loss as the cost of hedging
      • Hedging protects clients from significant exchange rate fluctuations that would result in their serious financial problems