It is a payment instrument for securing a currency at a pre-agreed exchange rate on a predetermined date
Ensuring the exchange is realized for a specific amount of funds on a certain date
We offer forwards in the EUR and USD currencies. The minimum amount to be secured is the equivalent of CZK 100,000
Due to constant market fluctuations in currency rates, all your transactions in foreign currencies are exposed to the risk of creating exchange rate losses. With currency forwards, you can eliminate the risk of losses by fixing the exchange rate at a certain date that is unchanged. Despite the constant volatility in the currency market, you will be protected against possible exchange rate losses and you will have certainty with your chosen exchange rate. The currency forward can be shortened or lengthened using a currency swap.
2.
NECESSARY DOCUMENTS
Copies of documents + account statements
3.
MAKING A DEPOSIT OF 10% + SERVICE FEE
The client has, as of April 1 2021, 100,000 EUR in their bank account, s/he expects the strengthening of the CZK currency, and s/he intends to hedge for 1 month. The current spot EUR/CZK exchange rate, the 1-month forward exchange rate is 26.80 EUR/CZK.
The client concludes a 1-month forward contract for the sale of EUR 100,000 at the rate of EUR 26.80/CZK with settlement on May 1, 2021.
S/he made a 10% deposit, i.e. EUR 10,000 (the deposit is refundable, only a fee of 0.30%, i.e. EUR 300, will be deducted).
Upon expiration, s/he delivers EUR 90,300 to the bank and the bank returns CZK 2,680,000 to him/her.
If at the time of the forward expiration the spot rate is lower than 26.80 EUR/CZK (CZK is stronger), the hedging paid off for the client, otherwise s/he realized a loss, which must be understood as the cost of hedging.
If the client does not have enough funds to pay the forward, s/he can extend the forward (by a so-called swap) for a set fee, see the price list (according to the volume in CZK).
1.
Depositing a refundable deposit from the forward amount
Only a one-time fee will be deducted from the 10% deposit depending on the volume of the transaction
2.
At the time of crediting the funds, the client can arrange a forward
Amount + exchange rate and currency of forward settlement
3.
The next day we will deliver a confirmation and a forward statement
Complete transaction parameters
4.
Two days before the expiration of the forward, the client is contacted by phone to pay the funds
5.
On the day of settling the forward, the funds will be transferred to the client's account
We have the best exchange rates on the market
Low limits on amounts to negotiate
We are flexible thanks to the possibility of shortening or extending the forward
| Transaction volume (in CZK) | Fee for arranging FX transaction |
|---|---|
| 100,000 - 1 million | 0.60% |
| 1 - 5 million | 0.30% |
| > 5 million | 0.15% |
