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Foreign Exchange
Spot Foreign Exchange
Companies involved in international trade may be required to make payments or to receive payments in a foreign currency. A spot contract allows a company to buy or sell foreign currency on the day it chooses to deal. You advise us of the amount, the two currencies involved and which currency you would like to buy or sell.
Benefits
- No minimum or maximum deal sizes.
- Fast processing time (settlement in two business days' time).
- Simple documentation process.
- Any currency pairs.
Forward Exchange Contract
A forward exchange contract is a binding obligation to buy or sell a certain amount of foreign currency at a pre-agreed rate of exchange on a certain future date. This is the simplest method of covering exchange risk. You advise us of the amount, the two currencies involved, the expiry date and whether you would like to buy or sell the currency.
Benefits
- Certain exchange rate for future transactions.
- Excellent planning tool for cash flow and budgeting.
Foreign Exchange Swap
HSBC can provide a limit of up to US$6 million and a maximum transaction tenor of 12 months. Foreign exchange credit line is required and major foreign currencies are available. Spot and forward FX transactions are performed for the same amount of the deal and spot and forward rates are quoted for each deal.
Benefits
- Eliminate potential exchange losses resulting from adverse exchange rate movements (however, you cannot take advantage of favourable moves).
- Increase cash flow liquidity.
- Good planning tool as cash flows mismatches are identified up front.
