You can conduct a swap deal that involves transfer of the settlement date, which will allow you to use one currency in the short term, providing another currency as a deposit. These operations are carried out when it is impossible to deliver one currency on the exchange day and the exact settlement date is unknown, so a forward contract is not an option. This is also a popular method of hedging currency risks and optimizing transactions.
Currency swap implies the mandatory re-sale or re-purchase at defined swap rate on a certain day in the future. The rate is calculated based on the difference between the current and forward rates.
To perform forward transactions you need to:
- sign an `Agreement for Financial Transactions and Posting of Collaterals`;
- deposit required collateral amount, specified in your agreement with the bank;
- the transaction amount should exceed EUR 6000.
Benefits:
- payments made in one currency backed by another currency;
- avoidance of fluctuations in currency rates and potential losses.
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