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Foreign Exchange

We offer hedging tools to assist in managing your Forex exposures, thus minimising the risks of currency fluctuations and volatility.

Managing Foreign Exchange Exposure
There are a number of strategies that can be employed when managing foreign exchange risk, such as:

	Do Nothing
	Which is to book your foreign currency requirements as they arise (fully exposed to currency fluctuations).

	Open a Foreign Currency Account (FCA)
	To debit / credit foreign currency account without converting to local currency as and when receipts and payments are due.

	Hedge
	Enter into Outright Forward Foreign Exchange Contracts, Options or Derivatives to hedge against currency fluctuations.

FX Contract Value Dates

Outright Forwards, LTFX & FX Option

Outright Forwards

	An agreement (obligation) to exchange a specified amount of one currency for another at a future date and predetermined rate (eg USD/MYR).
	Tenure is from SPOT to 1 YEAR.
	Requirement: Foreign Exchange Credit Limit (FECL) & Foreign Exchange Master Agreement (FXMA).

Long Term FX (LTFX)

	An agreement (obligation) to exchange a specified amount of one currency for another at a future date and predetermined rate (eg USD/MYR).
	Tenure is from 1 YEAR onwards.
	Requirements: FECL & International Swaps and Derivatives Association agreement (ISDA).

FX Option

	An option is the right, not the obligation, to buy or sell a certain currency at a predetermined strike price on a specific date.
	This hedging tool is attractive as it allows you to lock in your cost / returns and at the same time gives you the upside potential from favorable changes in the rate.
	Tenure is from 1 MONTH onwards.
	Requirement: < 1 YEAR - FECL & FXMA; > 1 YEAR - FECL & ISDA.