Foreign exchange transactions
If you have funds in different currencies you may need protection from the unfavourable shift of the exchange rates. Ūkio bankas offers to conclude derivative FX transactions that will save your funds from depreciation and will help to balance your cash flows.
Foreign Exchange Forwards
FX forward is a contract between you and the Bank in which the counterparties agree to buy and sell a specified amount of different currencies at some future date, with the exchange rate being set at the time the contract is entered into. Such contract protects against the exchange rate risk of receiving future income at unfavourable rate.
It is wise to conclude such deals:
- When you receive credit in one currency and use it in another currency;
- When you buy goods under the terms of deferred payment in one currency and sell the goods in another currency.
Foreign Exchange Swaps
Under FX swap contract you agree to exchange currencies for a certain period of time. This financial transaction involves immediate buying or selling of the agreed amount of one currency simultaneously agreeing to reverse the exchange at a future date at the rate agreed upon during the transaction day. A FX swap is documented as two foreign exchange transactions.
Such contracts are suitable to increase your working capital in the required currency by using free funds in other currencies.
Foreign Exchange Over the Counter Option
FX OTC Option is an agreement that gives the holder, in exchange for a premium paid at the outset, the right but not the obligation to call or put the agreed amount of currency for another currency at a strike price on an agreed-upon date in the future.
What are the terms of structured derivative FX transactions?
- Derivative transaction may be concluded submitting surety to the bank, the amount of which depends on the amount of the transaction and its term.
- The shortest term is 3 days, and the longest term is 12 months.
- It is necessary to have an account with Ūkio bankas.
To conclude a derivative FX transaction please contact the employees of the Treasury Department by phone +370 37 301 391. We will negotiate the individual terms and procedure for your transaction. For more information send your enquiry via the Internet.
