Myforexeye met an exporter when the USDINR spot was at 72.40.The forward premium for April was 70 paise.
He had a benchmark rate of 73 and was getting a net rate of 73.10, which was above his benchmark rate. Client was willing to book the forward as it was above his benchmark rate but Myforexeye suggested to wait for a better opportunity.
We recommended the client to wait for a better opportunity because Myforexeye was inclined towards rupee weakening. The client was nervous because the rupee was below his benchmark and not booking forwards on time could land him in trouble.
We suggested that instead of taking a forward contract, he should book a range forward. Range forward contracts are constructed to provide settlement for funds within a range of prices. They require two derivative positions which creates a range for settlement at a future time. We did a buy put sell call option that would give us a minimum rate of 73.10 and a maximum rate of 73.60.
Selecting the best hedging tool is very important depending on the market situation. If the client had chosen to book a simple forward contract, he would have gotten a maximum of 73.10 but now he will get a minimum of 73.10 and a maximum of 73.60
08 Apr 2021 05:50 PM
A Bengaluru based exporter, banking with a leading private bank, had an inward of USD 79,586.
27 Mar 2021 06:38 PM
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.
19 Mar 2021 05:30 PM
Exporter Saves INR 17,370 On A Single Transaction
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.