FX Forward Contracts
Lock in Foreign Exchange Currency Rates
Exchange rates can be volatile, making it difficult for business customers to predict their expenses and revenues when working with overseas vendors and customers. With our FX Forward Contracts, you can help your business customers “lock in” exchange rates on business contracts for a future date. This ensures your business customer receives predictable cashflow and you generate another stream of fee income.
Grow your credibility and serve as a consultant to your business customers, as they seek financial advice on doing business overseas. We can help you deliver and execute foreign currency transactions when needed.
Key Benefits:
- Attract and retain customers with a robust suite of international banking services
- Expand risk consultation capabilities
- Generate additional fee income
How do FX Forward Contracts Work?
Future currency exchange rates are nearly impossible to predict, so PCBB provides a workaround that can help you gain a competitive advantage. FX forward contracts allow your business customers to buy or sell a set amount of currency at a predetermined rate of exchange for a future date.
A strategic FX hedging program helps customers optimize their bottom line and reduce the overall volatility of foreign payables and receivables, regardless of the trend and direction of the FX markets.
A master agreement is executed between you, your customer and PCBB.
On trade date, PCBB receives the trade details from your customer. The contract rate is calculated using the prevailing market rate (spot rate) at the time of booking.
On contract maturity date, you manage the settlement between your customer and PCBB. PCBB manages the settlement of the foreign currency funds.
Benefits to Your Customers:
- Helps customers protect their international profit margins
- Stabilizes their cost of imports and foreign expenses
- Optimizes their bottom line
- Allows customers to plan ahead effectively
Understanding FX Forward Contracts
To learn more about how FX forward contracts work and why they are beneficial for your business customers, watch our webinar.
