Manage your currency risk

In international trade you need to consider how to manage your currency risk. Currency fluctuations can have a direct impact on your bottom line and make planning and budgeting difficult. We can help you protect against that type of risk.

By choosing Forward with Time Option you get a fixed exchange rate for an agreed period. The exchange rate is therefore known for your future payments. 

This will:

  • Minimize currency risk in an easy and efficient manner
  • Improve financial planning
  • Improve the predictability of your business

Why Exchange at home and Forward with Time Option?

If you’re involved in foreign trade - whether it is imports or exports - it makes sense to use your trading partner’s domestic currency whenever possible and do the exchange with Nordea. For example, a Swedish customer pays you in SEK instead of EUR, and Nordea converts them into EUR. It can give you a competitive advantage by:

  • Making things easier for your trading partners
  • Increasing your customer satisfaction
  • Saving costs and offer better prices

However, carrying the currency risk yourself means you should hedge against it, for example by using Forward with Time Option.

How does Forward with Time Option work?

Forward with Time Option can help you manage currency risk by fixing the euro value of your payments in foreign currency for up to two years. For example, if you make payments in USD, we can agree on a fixed exchange rate for your future USD payments for the agreed period. 

When entering into a Forward with Time Option, agree on the amount, maturity date and exchange rate. Please note that once signed, the agreement is binding for both parties. It means that if we agree on a Forward with Time Option for 200 000 USD for one year, you must use the whole amount within the year. However, you can use the fixed rate at anytime and in as many instalments as you wish during the agreed period.

Risks

Forward with Time Option is a financial derivative and you must be aware of and understand the potential risks of the product. The Forward with Time Option  agreement is binding, regardless of what happens to the exchange rate and the commercial agreements that you intend to hedge. 

Please note that an unused contract can cause FX loss or gain.

More information in the KID documentOpens new window

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