FX rate protection

FX rate protection can be used to hedge your currency flows

Nordea’s FX rate protection provides a safe and appropriate way to hedge against FX rate risk in many business situations. It is suitable for every currency need in your business to ensure that a given FX rate does not deteriorate from its present level.

Due to FX rate protection, the exchange rate used in foreign trade cannot weaken from the initial level; it can only improve. FX rate protection locks in the upper or lower bound of the FX rate used in a future foreign currency payment, thus preventing FX rate losses. However, it allows for gains if the exchange rate improves.

The cost of FX rate protection is about 1 - 4% of the amount of currency to be hedged.

How does your business benefit from FX rate protection?

• FX rate protection stabilises the value of foreign currency items.
• You will know the minimum value of future currency flows.
• You will receive full benefit from any FX rate improvement.