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 Euro.
The Euro was trading at its multiyear peak, with the view that there would be correction in at least 2 months’ time, the view could’ve been executed by rolling over the forward contract. The contract would’ve been booked as anticipated exposure, but unlike earlier the gains on cancellation would’ve not been credited due to amended RBI regulation. https://www.rbi.org.in/Scripts/BS_ViewMasDirections.aspx?id=10485
Myforexeye advised them to short EURINR futures in the stock exchange for end February 2021 @ 90.1375. At the end of 2 months client exited the position with a gain of INR 2.14 on 150 lots (1 lot = $1,000).
Futures provided the client with the flexibility to leverage the benefit of daily MTM settlement through partially exiting the short position @ 88.22, though aware that better buying opportunities would be in sight. Further positions were exited with a net buying rate of 87.85 and 87.90, giving a profit of INR 2.1803 per Euro.
This strategy helped in recovering about 50% of the losses booked in the forward contract in December through the futures contract within 2 months.
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
05 Mar 2021 03:06 PM
Myforexeye met an exporter when the USDINR spot was at ?72.40.The forward premium for April was 70 paise.
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.