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Hedge foreign exchange risks flexibly
Exchange rate fluctuations can sometimes have unpleasant consequences for your international business transactions. But clever use of the various forex transactions offered by İŞBANK allows you to minimize most of these foreign exchange risks.
A foreign currency account at İŞBANK is the optimal starting point for foreign currency trading. If you require foreign currency quickly, spot exchange deals (FX transactions) offer you rapid access at the prevailing exchange rate.
If you require foreign currencies only in the medium to long term, forward currency deals are your best bet. We offer two options: forward or swap transactions.
In a forward transaction, you enter into a binding obligation based on an underlying instrument. Delivery and acceptance are based on the underlying and take place on a fixed date.
Swap deals are special foreign exchange transactions. In this transaction, one partner immediately provides foreign currency to the other partner (spot transaction), while at the same time, the participants agree a repurchase at a fixed exchange rate on a predetermined date. In other words, an amount in foreign currency is purchased with a certain maturity and in the same transaction, sold again to the other business partner at a later date.
Forward transactions have proven to be good exchange rate hedges above all for finance facilities – loan transactions that require a cash payment by the lender, as well as later repayment by the borrower. The borrower can therefore eliminate foreign exchange risk by both buying and selling the foreign currency simultaneously using a forward transaction rather than carrying out these two transactions in separate spot transactions on different dates.
Our branches would be happy to advise you on how best to take advantage of these instruments to hedge foreign exchange risks in your import and export business.