Dry Fruit Importer- Forex Process Improvement

Dry Fruit Importer- Forex Process Improvement

20 Jun 2018 06:04 PM
Myforexeye Research Report


A north Based Dry Fruit Importer is having a turnover of around Rs 200Cr is banking with a Private bank. They are having exposure in USD only, they are not using any medium for reference to cross verify the rates offered by the bank. Having such huge amount of forex exposure with them they do not have skilled designated personnel to manage and are looking for some assistance to manage and improve their forex risk management practices.

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The management is more concerned about their regular business activities and want to lay more emphasis on forex risk management. They have been using freely available online platforms for their currency conversions. Recently as the currency fell from Rs 65 to above 68 per dollar, they added a huge risk to their business and thus their already low-margins were affected.

To improve their forex risk management process and form a system for the same, we advised the management to report the import orders as and when they arise. We informed them about the live inter-bank terminal and the know-how of the market. They have also been advised to follow benchmarking process of protecting the first day forward rate. Our objective will be to make the payment at the best rate, increasing their savings as compared to the benchmark rates. As the process is being streamlined, we managed to protect the benchmarks in most of the payments, hence saving a huge cost for the company.

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