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.
MSMEs in India are eligible for an interest subvention of 5% and forward contracts accrue an annualized premium of 4-4.5% bringing costs down to below zero percent.
We suggested the client to switch from PCFC to PCINR which would entitle him for the interest rate subvention. PCINR loans are initially provided at higher rates of around 8-9% from the bank. We made him aware that he is eligible for getting the interest rate subvention of 5% reducing his borrowing cost from 9% to 4%. In order to further reduce this cost, we advised him to book forwards which would help him save the remaining 4% by receiving forward premiums.
Myforexeye advisors were able to save 4% interest cost that the exporter was paying for his working capital needs and bring down the borrowing costs to zero.
18 Jun 2021 03:49 PM
A client had an exposure of USD 1 million receivable in seven equal tranches of USD 0.142 million each between August to February. He receives documents only one month before his receivables are due.
11 Jun 2021 01:37 PM
A U.P. based exporter had an inward of USD 150,000 in May 2021 to be converted to Indian Rupees. Forward premium were at its 4.5 years high in May so cash spot discount was also high around 5-6 paise.
05 Jun 2021 12:28 PM
A fruit exporter approached Myforexeye to better optimize forex risk management. He had an exposure of $300,000 every month and was banking with a large foreign bank in India.
31 May 2021 09:10 PM
A perishable goods exporter needed to hedge USD 0.5 million inwards anticipated in July but was unable to hedge as forward limits were not available to him.
29 May 2021 01:59 PM
A client had opened an import L/C for EUR 500,000 on 11th January 2021 with an expected due date of 31st March 2021. The client was unsure if he should hedge his position or not.
07 May 2021 01:04 PM
Our existing client, an IT company had contracts spanned across 2 years. They had Long term exposure of USD 12 million but were unable to hedge long term forwards i.e. more than 1 year.