Why you may need "non-deliverable foreign exchange forward contract?

When you want to hedge against certain currency whose government exercise foreign exchange control or forward contract is limited to only local participants, then NDF is a good tool for hedging the foreign exchange risk.

What is function and advantage for "non-deliverable foreign exchange forward contract?

Good tool for foreign exchange risk hedging NDF will be settled on the pre-determined exchange rate on the maturity date without the actual delivery of currency exchange; client can either collect or pay the net difference. Choosing delivery or non-delivery forward contract, the client should have certain understanding of the currency trend and the related economies; otherwise, unnecessary financial burden may be raised. When you want to hedge against certain currency whose government exercise foreign exchange control or forward contract is limited to only local participants, then NDF is a good tool for risk hedging and cost saving. Taking advantage of flexible spot settlement and features of forward contract which can satisfy urgent fund needed and lower the cost.

What is "Forex Forward Contract" ?

Forex Forward Contract is a foreign exchange transaction contract delivers beyond more than two business days. Both parities are obliged to deliver the contract in a future delivery day or period, specified with certain currencies, amount and the exchange rate set in the forward contract today.

What is "non-deliverable foreign exchange forward contract" ?

Non-deliverable Forward Contract is foreign exchange derivatives product traded over the counter. The customer and the counter-party agree to exchange two currencies at pre-determined rate at a specified date in the future. However, there is no physical delivery of two currencies. Both parties will compare the spread between the spot rate and the pre-determined rate and settle the spread in either currency (if USD against RMB, the settlement currency will be in USD).

Forward contract transaction

Example

How to manage the FX risk？

Details

Next Step

If you want to apply for "Foreign Exchange and International Settlement" , account opening procedure as follows:

1.Call or email our customer service agents and get the respective application forms
2.Fill in the application, provide ID identification and the follow up with the customer service agents
3.Deposit and then you can enjoy our services

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