This document provides an overview of non-deliverable forwards (NDFs), which are used to hedge exposures to currencies that have restrictions on foreign exchange or high political risk. NDFs are settled offshore in hard currency, avoiding local restrictions and credit risk. They allow companies and investors to hedge transaction exposures and financial investments. The document discusses when NDFs are used, how they are priced, an example of hedging a Korean equity portfolio with NDFs, and NDF documentation requirements.

1. NDF-Guide
SEB MERCHANT BANKING – EMERGING MARKETS July 2009
Foreign exchange in emerging markets When are NDFs used?
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êÉéä~ÅÉ= çåëÜçêÉ= ëéçí= ÇÉ~äë= Ñçê= íÜçëÉ= êÉèìáêáåÖ= éÜóëáÅ~ä= Further information
Å~ëÜK=eçïÉîÉê=~å=kac=Å~å=ÅçãéäÉãÉåí=~åÇ=ÄÉ=ìëÉÇ=~ë= cçê=ÑìêíÜÉê=áåÑçêã~íáçåI=éäÉ~ëÉ=Åçåí~Åí=óçìê=äçÅ~ä=pb_=
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2. SEB MERCHANT BANKING – EMERGING MARKETS July, 2009
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