A Pune based dollar exporter and GBP importer. The promoters are aware about the forex market movements and they regularly track local equities. They are able to manage the usual USDINR and GBPINR conversions with minor slippages in exchange rates.
They have dollar amounts in their EEFC account and want to use it to make GBP payments. The promoters have little understanding as to how to proceed on this.
Myforexeye Value Addition
Discussed about their business to understand how their company is affected by forex market volatility. We gave a brief about forex markets, live interbank platform, cross currency rates, etc. We suggested them to take us on a con-call while transacting with the bank. The agreed inter-bank margin with the bank was at 12 paisa per USD – we suggested that such margins are high considering their annual forex business. Recommended to negotiate with their bank and reduce the margin to 5-6 paisa per USD.
As the client was having USD in his EEFC account and wanted to do a GBP import payment, his transaction is sell USD and buy GBP – he needs a cross currency rate. When the client negotiated the GBPUSD cross currency rate, he was offered 1.3449. The prevailing live cross currency rates were around 1.3349. A Myforexeye dealer took up the case and a con-call was done with the bank – looking at live terminals, he was able negotiate at a net rate of 1.3355, thereby saving 94 dollar pips per GBP or about 60 paise per GBP.
Recommended the client that our existing service namely TPO (Transaction Process Outsourcing) addresses the issue of non-transparency of exchange rates. For this service, the client authorises our dealers to book forex rates on behalf of the company. Our dealer transacts using live inter-bank terminals to negotiate with the bank and ensures that accurate exchange rates accrue to the client. Myforexeye has conceptualized and pioneered transaction process outsourcing services in India.