Delhi Based Textiles Exporter - Transaction Process Outsourcing Service

Delhi Based Textiles Exporter - Transaction Process Outsourcing Service

16 Nov 2019 04:30 PM


Delhi based manufacturers of institutional and home furnishings, fabrics and hospital textiles exporter with market base across the country and other Asian and European nations. The client had recently started using our TPO service and had to book a EURINR export forward for EUR 1,00,000 with a PSU bank.

Myforexeye Value Addition:

Myforexeye dealer approached the bank’s Treasury for booking the forward contract for fixed maturity 24-Dec-2019. The banker offered a net forward rate of 79.46. Myforexeye dealer argued that the market rate is coming as 79.86 on Reuters’ terminal. The banker then offered a net forward rate of 79.53. Myforexeye dealer asked what forward premium he was offering and asked for EURUSD and USDINR premiums separately for 24-Dec-2019. The banker offered 45 pips for EURUSD and 39 paise for USDINR on which Myforexeye dealer argued that the export forward premiums being shown on Reuters’ terminal were 50 pips and 45 paise respectively. After a round of negotiations, the banker said that the best premiums he could offer were 45 pips for EURUSD and 41 paise for USDINR and gave the revised net forward rate as 79.55.

Myforexeye dealer argued that from the market rate of 79.85 prevailing, he was still offering 25 paise lower and the agreed margin of the client with the bank was only 5 paise. But the banker was not agreeing. Myforexeye dealer then asked the banker for USDINR and EURUSD spot rates and he gave 71.51 and 1.1043 as the spot rates on which Myforexeye told that the spot rates prevailing were 71.53 and 1.1048. The banker agreed for the same and offered to increase the spot rates to 71.53 and 1.1048 and gave 79.60 as the net EURINR export forward rate for 24-Dec-2019. Myforexeye dealer argued that it was clearly an unethical practice because as per the spot rates and forward premiums quoted by the banker himself, the EURINR forward rate was coming as 79.80 and with 5 paise margin, the net forward rate should have been 79.75. The banker then asked Myforexeye dealer to call back after a minute saying that he would check with his trader for a better rate. In the next call, the banker agreed and offered a net EURINR forward rate of 79.75 for 24-Dec-2019.

The client was highly satisfied with the TPO service of Myforexeye as we could successfully improve the EURINR forward rate from 79.46 initially offered to 79.75 and saved a sum of INR 29,000 for the client on a single forex transaction.

Recommended for you...