Currency forward
Currency forward (also known as a “forward currency conversion”) is the conversion of funds from one currency to another, settled later than the second business day after the trade is agreed upon. The trade is agreed upon by phone based on a framework agreement. The forward rate always reflects the current situation on the interbank market. A forward allows the client to fix a firm exchange rate today for a conversion that will take place in the future (this rate is guaranteed by the bank regardless of the level of the relevant rate on the day of the conversion).
Variations – forward with floating maturity (instead of conversion on a specific date, the client agrees on a fixed exchange rate for a conversion that will be carried out in a chosen future period, e.g., during a week, thus having greater flexibility in planning their cash flows).
An exchange rate reflecting the current state
of the interbank market
Currency hedging
The product is intended for clients whose goal is to:
- minimize exchange rate risk arising from future cash flows involving conversion from one currency to another (future foreign exchange payments, transfers between accounts in the future, etc.).
Conditions for concluding a transaction
- signed Request for trading with the Bank
- minimum amount of 30 000 EUR (or equivalent in another currency)
- sufficient collateral for the trade and an approved trading limit
- EMIR and LEI code i
- trade agreement time: 8:30 AM – 4:00 PM
https://www.tatrabanka.sk/en/business/financial-markets/currency-forward/