Plain FX Forward

Plain FX Forward

Ensure predictability during adverse movements in the FX market

In a plain FX forward, the client has the obligation to sell one currency and buy another currency on a certain future date at a pre-agreed rate.


Features of Plain FX forward

044

Obligation of the client to deliver the agreed amount in the respective currency at maturity.

048

Complete protection against adverse market movements.

029

The client does not have the opportunity to take advantage of favorable market movements



Example: The client execute a plain FX forward, with the obligation to sell EUR 1,000,000 and buy USD 1,190,000 on 30.11.2017 (maturity). At maturity, the transaction is performed at the pre-agreed rate - 1.1900.



Target market of the product

The plain FX forward is a financial instrument, which the Bank manufactures and distributes as a product. The table below sets out the criteria for determining for which client profile the product is compatible with or not.

 

Positive

Negative

Type of clients

all types of clients: retail, professional and eligible counterparties

 

Clients’ knowledge and experience

- the movement and the possible expectations regarding the hedged reference values;

- lost profits or realized losses related to a negative change in reference values;

- hedging cash flows by entering a FX forward in relation to future receipts or payments on liabilities;

- the process of permanent collateral maintenance

does not meet the indicated knowledge and experience requirements

Clients’ financial situation with a focus on the ability to bear losses

ability to bear a negative result due to FX rate change within the term of the instrument and its maturity

 

Clients’ risk tolerance and compatibility of the risk

low-risk profile, due to the ultimate objective to fix the FX rate to the expected receipts/payments

inclined to bear the risks of negative deviations of the reference values

Clients’ objectives and needs

hedging adverse FX rate fluctuations or speculating

 



Contact dealers:

Treasury Sales Department

 

Deyan Mankovski – Head of the Treasury Sales Department– 02 80 10 862

Kalina Mays – Head of FX Department, Treasury Sales Department – 02 97 66 233

Milena Lukanova – Senior Dealer, Treasury Sales Department – 02 97 66 232

Hristo Arnaudov – Dealer, Treasury Sales Department – 02 93 91 364

Velichko Dimov – Dealer, Treasury Sales Directorate Department – 02 93 91 126

Stoyan Georgiev – Senior Dealer, Treasury Sales Department – 02 93 91 130

Hristo Sugarev – Dealer, Treasury Sales Department – 02 93 91 133

Ivelin Ivanov – Senior Dealer, Treasury Sales Department – 02 93 91 365

Martin Georgiev – Dealer, Treasury Sales Department – 02 97 66 234

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