Fasteners and Machine Components Manufacturer - Transaction Process Outsourcing

Fasteners and Machine Components Manufacturer - Transaction Process Outsourcing

04 May 2019 06:18 PM


A fastener and machine components’ manufacturer with exports mainly in Europe and the U.S. Client had to book EURINR export forward for EUR 2,30,000 with the bank. The client did not have a direct access to his bank’s Treasury and the forward contract was to be booked after negotiating rates with the banker at the Branch.

Myforexeye Value Addition:

Client had recently started using our TPO service and he connected Myforexeye dealer on call to the banker at their Branch. Myforexeye dealer asked the banker to quote the EURINR spot rate first. The banker quoted EURINR spot rate as 78.19 after taking quote from the Treasury. Our dealer argued that the EURINR spot rate was at 78.26. She then offered 78.20 as the best rate. Our dealer negotiated for a better rate but the banker turned aggressive saying that if you do not agree to this rate, you can opt to not book the forward contract at this rate adding that she can’t spend too much time in closing one deal. She further added to avail E-Forex facility of the bank and book forex deals using that platform.

EURINR spot had come to 78.22 by this time but the banker said that now the spot has come to 78.1950. Our dealer argued to quote the correct rate. But the banker resisted saying she doesn’t have access to live rates and she is quoting only what the Treasury is quoting her. After a lot of negotiations, the spot was locked at 78.20.

Myforexeye dealer then asked for EURINR forward premium for 75 days and the banker quoted 79 paise as the premium on which our dealer argued that the premium was 124 paise on the Reuters’ terminal. The banker immediately quoted 123.50 paise. This was a reflection of how the banks overcharge their clients on forex transactions who are not cognizant of the live forex rates. The client was satisfied with the service of Myforexeye as our dealer serviced the client to save approximately 45 paise on a transaction of EUR 2,30,000 that amounted to a saving of INR 1,03,500.

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