4. Selling your FX forward
You need to know the following:
1. How much FX you have coming in
2. Approx when it will arrive
3. Your costed rate of exchange
4. That you have 10% of the Rand value ready to secure the hedge
5. Selling your FX forward - USD
Current spot rate 13.36
1 month forward rate 13.42
3 month forward rate 13.56
6 month forward rate 13.77
6. Selling your FX forward - EUR
Current spot rate 14.24
1 month forward rate 14.32
3 month forward rate 14.52
6 month forward rate 14.81
7. Selling your FX forward
FX Amount USD25,000
Costed Rate 12.50
Expected Rand R312,500
Locked in rate (3 months) 13.56
Actual Rand R339,000
Positive R26,500 (8.5%)
8. Not sure when the FX will arrive?
We use flexible partially-optional forwards
To use this type of hedge we need 2 dates from you
The earliest you expect the FX to arrive (near date)
The latest you expect the FX to arrive (far date)
Near date Far date
Date window for receipt of FX