A Tiruppur based fabric exporter had booked forwards expiring on May 29th, 2020 but due to lack of inward remittances, he had to roll over the forward contracts. The challenge encountered by him was the uncertainty in the Rupee spot price and the severe liquidity crunch he was amidst.
The usual approach during a forward rollover is to aim for a higher spot so that the forward rate received is as high as possible so that even if it’s lost now it will be covered at the time of forward utilization. The aftermath in the client’s situation was incurring heavy cash loss on cancellation during times of liquidity crunch. The client would have needed funding to pay for the cash losses incurred by him.
Myforexeye advisors suggested him to target a lower spot and wait until forward maturity date as huge dollar inflows were expected on account of FDI.
Since the client was a TPO customer our dealing desk executed the deal and negotiated the cancellation rate of 75.56 after adding the bank margin.
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.
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.