A Delhi based exporter with a monthly exposure of USD 100,000 was managing their forex exposure by booking window forward contract with their bank. They were availing 90% EPC (USD90, 000) of their exposure and were hedging only 50% (USD 50, 000) of exposure.
They came to Myforexeye to better optimize their forex risk management practices.
We advised the exporter to switch to fixed date forward contract from window forward contract as in latter they were getting premium till the start of the window period rather than the maturity date therefore losing premium for the differential days.
For e.g. Forward premium from 1st Jan till 30th April
Forward Premium using Window forward contract- 50 paise (1st April to 30th April)
Forward Premium using fixed date forward contract- 75 paise (30th April)
Secondly, the exporter was taking EPC, he was hedging it partially so we advised him to fully hedge the EPC to become independent of directional view (no concern of unfavourable Spot) https://www.myforexeye.com/pcfc-vs-rupee-packing-credit.
By switching to fixed date forward contract from window forward contract the exporter could save up to 20-25 paise per dollar INR 12,500 (50,000*0.25) and by fully hedging the EPC they could additionally save INR 30,000 (40, 000*0.75).
08 Apr 2021 05:50 PM
A Bengaluru based exporter, banking with a leading private bank, had an inward of USD 79,586.
19 Mar 2021 05:30 PM
Exporter Saves INR 17,370 On A Single Transaction
05 Mar 2021 03:06 PM
Myforexeye met an exporter when the USDINR spot was at ?72.40.The forward premium for April was 70 paise.
25 Feb 2021 06:10 PM
Our existing client, a garment exporter had hedged his receivables and sold EURINR forward @85.60 for Dec 2020 but part of their order got cancelled. They were able to cancel the balance contract only on maturity @89.90, booking a loss of INR 4.3 per
19 Feb 2021 12:12 PM
A Maharashtra based agro products exporter was taking working capital loan in foreign currency at 4% (LIBOR+200 to 250 bps). He wasn’t aware of PCINR/RPC, a packing credit loan available to Indian exporters.
24 Dec 2020 12:21 PM
Trade call given my Myforexeye on 10th November was to sell GBPUSD 25th November Futures.