Apr 13 2018

North based Exporter Forex Portfolio Management

CASE

A North based exporter of designer decorative and bath accessories having exposure of around 30-40cr banking with a private bank. They are actively managing their exposure, as their receivable are spread throughout the month they generally take window forwards. They are having a margin of 5 paisa with the bank for cash transactions and a margin of 25 paisa for forward transactions.

 

Myforexeye Value Addition

The management is well informed about the knowhow of the forex markets. Advised them to avoid booking window forwards as we loose on to the premium of whole month by following this practice. Advised them to go for fixed date forwards and that we can early utilise those forwards as well if we receive any inward during the month. The bank along with the hefty margin on forward transactions used to overcharge them by around 5-7 paisa. Had a word with their account manager from branch to discuss about different margins they are charging for cash and forward transaction. The relationship manager didn’t gave a valid justification against the same, advised them to take up this issue with their bank. Advised them to get direct treasury access for forex dealing so as to get the market rate.

After Myforexeye involvement they managed to gain on premium by doing month end forwards and early utilising the same as and when required. They saved on bank margin after setting a fixed margin with the bank of 7 paisa on both cash and forward transactions. After getting direct treasury access they are saved around 5 paisa on every transaction getting market rate.