CROSS CURRENCY
FORWARD
CONTRACTS
Module:7
1
CURRENCY IS AT PREMIUM
ADD EXCHANGE
CURRENCY AT DISCOUNT
DEDUCT EXCHANE
PREM
A: BUY
PREVIOUS MONTH OF DUE DATE(AUG), TAKE JULY RATE
B: SELL
SAME MONTH ,DUE DATE (AUG) Take AUG
DISCOUNT
BUY
SAME MONTH OF DUE DATE(AUG) TAKE AUG
SELL
PREVIOUS MONTH, JULY
DO NOT SHARE THE SLIDES WITH ANYBODY OUTSIDE THE CAMPUS
CHF10000
SALE PURCHASE
Exporter $ALE US
SALE DOLLAR IN
SBI INTER
$ALE CHF
IN BANK
SINGAPUR MARKET
MARKET GET
GET US INDIAN
DOLLAR RUPEES &
PURCHASE PURCHASE
DELIVERE
S$10000
TO
IMPORTER BOB
EXPORTER
SALE
On 16th July, an exporter requests to book a forward
contract for fixed delivery 2 months in respect of a 30
days bill for CHF1,00,000. In the interbank market
the rates for US dollar were as under
Spot USD 1= Rs72.6850/7275
Spot Aug 4000/4200
Spot Sept 7500/7700
Spot Oct 1.0500/1.0700
Spot Nov 1.4000/1.4200
[Link] was quoted in Singapore as follows
Spot USD1= CHF 0.8250/8275 DO NOT SHARE THE SLIDES WITH ANYBODY OUTSIDE THE CAMPUS
1 month forward 0112/0102
2months forward 0202/0192
3 month forward 0300/0295
4 months forward 0385/0378
(a) The exchange rate to quote
(i) Transit period 25days
(ii) Exchange Margin is 0.10%
On 16th July, an exporter requests to
book a forward contract for fixed In the Dollar/CHF quote, CHF is at a discount( Forward margin in
delivery 2 months in respect of a 30 days descending order). Since the selling rate is being considered , the
bill for CHF1,00,000. In the interbank forward margin will be taken for three months rounding off to the
market the rates for US dollar were as lower month i.e 3 month.( 4 months constitute ,the forward period
under of 2 months , Usance 30 days and transit period 25 days).
Spot USD 1= Rs72.6850/7275 Dollar/CHF market spot selling rate CHF 0.8275
Spot Aug 4000/4200 Less : Discount for three months 0.0295
Spot Sept 7500/7700 Selling Rate CHF 0.7980
Spot Oct 1.0500/1.0700 Considering the forward period of 2 months,
Spot Nov 1.4000/1.4200 Usance 30 days and transit period of 25days , the
DO NOT SHARE THE SLIDES WITH ANYBODY OUTSIDE THE CAMPUS
[Link] was quoted in Singapore as bill is expected to realize on 7th Nov. US dollar is at
follows a premium against rupee. Therefore, the period
Spot USD1= CHF 0.8250/8275 will be rounded off to end Oct.
1 month forward 0112/0102 Rupee/Dollar market spot buying rate Rs72.68500
2months forward 0202/0192 Add: Premium for Oct Rs 1.05000
3 month forward 0300/0295 Rs73.73500
4 months forward 0385/0378 Less Exchange Margin 0.10% on 73.73500 Rs 0.07373
(a) The exchange rate to quote Buying rate for Dollar Rs 73.66127
(i) Transit period 25days Bill buying rate for CHF(73.66127 /0.7980) Rs92.30735
Rounded off to nearest multiple of 0.0025(FEDAI) Rs92.3075
(ii) Exchange Margin is 0.10%
On 16th July, an importer requests to
book a forward contract for bill for In the Dollar/CHF quote, CHF is at a discount( Forward margin in
CHF1,00,000 for fixed delivery three descending order). Since the buying rate is being considered , the
month. In the interbank market the forward margin will be taken for three months rounding off to the
rates for US dollar were as under same month i.e 3 month.
Spot USD 1= Rs72.6850/7275 Dollar/CHF market spot buying rate CHF 0.8250
Spot Aug 4000/4200 Less : Discount for three months 0.0300
Spot Sept 7500/7700 Buying Rate CHF 0.7950
Spot Oct 1.0500/1.0700 US dollar is at a premium against rupee.
Spot Nov 1.4000/1.4200 Therefore, the period will be rounded off to 3
[Link] was quoted in Singapore as month as it is a selling of currency transaction.
DO NOT SHARE THE SLIDES WITH ANYBODY OUTSIDE THE CAMPUS
follows Rupee/Dollar market spot selling rate Rs72.72750
Spot USD1= CHF 0.8250/8275 Add: Premium for 3rd month(OCT) Rs 1.05000
1 month forward 0112/0102 Rs73.77750
2months forward 0202/0192 Add: Exchange Margin 0.15% on 73.7775 for TT Rs 0.11066
3 month forward 0300/0295 selling rate Rs 73.88816
4 months forward 0385/0378 Add: Exchange Margin 0.20% on 73.88816 for Bill Rs 0.14777
(a) The exchange rate to quote selling rate Rs74.03594
(i) Exchange Margin for TT selling rate
is 0.15% Bill buying rate for CHF(74.03594 /0.7950) Rs93.12697
(ii) Exchange Margin for bill selling rate is Rounded off to nearest multiple of 0.0025(FEDAI) Rs 93.1270
0.20% Rate QUOTE: Rs93.1275
On 16th July, an importer requests to book a forward
contract for bill for CHF1,00,000 for fixed delivery
three month. In the interbank market the rates for US
dollar were as under
Spot USD 1= Rs72.6850/7275
Spot Aug 4000/4200
Spot Sept 7500/7700
Spot Oct 1.0500/1.0700
Spot Nov 1.4000/1.4200
[Link] was quoted in Singapore as follows
Spot USD1= CHF 0.8250/8275 DO NOT SHARE THE SLIDES WITH ANYBODY OUTSIDE THE CAMPUS
1 month forward 0112/0102
2months forward 0202/0192
3 month forward 0300/0295
4 months forward 0385/0378
(a) The exchange rate to quote
(i) Exchange Margin for TT selling rate is 0.15%
(ii) Exchange Margin for bill selling rate is 0.20%
One export customer requests on 8th May to book a
forward contract to cover an export bill for Singapore
dollar 1,00,000 drawn on Singapore and payable 30 days
after sight with option over the month of july. The
following rates prevail in interbank market for US Dollar
Spot(8/5) USD1= Rs 72.4875/4925
Spot May 1600/1700
Spot June 3100/3200
Spot July 4600/4700
Spot Aug 6100/6200
Spot Sept 7600/7700
Spot Oct 9100/9200
At Singapore market US Dollar is quoted as
Spot (8/5) USD1= SGD 1.4004/4078
1 month forward 70/75
2 months forward 110/115
3 months forward 150/155
4 month forward 190/195
5 month forward 230/235
6 month forward 270/275
Transit period is 20 days. Exchange Margin :0.10% DO NOT SHARE WITH ANY BODY OUTSIDE THE CAMPUS
Quote the rate 8
One export customer requests on 8th May to book a forward contract to cover
an export bill for Singapore dollar 1,00,000 drawn on Singapore and payable
30 days after sight with option over the month of july. The following rates
prevail in interbank market for US Dollar
Spot(8/5) USD1= Rs 72.4875/4925
Spot May 1600/1700
Spot June 3100/3200
Spot July 4600/4700
Spot Aug 6100/6200
Spot Sept 7600/7700
Spot Oct 9100/9200
At Singapore market US Dollar is quoted as
Spot (8/5) USD1= SGD 1.4004/4078
1 month forward 70/75
2 months forward 110/115
3 months forward 150/155
4 month forward 190/195
5 month forward 230/235
6 month forward 270/275
Transit period is 20 days. Exchange Margin :0.10% DO NOT SHARE WITH ANY BODY OUTSIDE THE CAMPUS
Quote the rate 9
One export customer requests on 8th May to book a US Dollar is at a premium against Singapore dollar. Since
forward contract to cover an export bill for Singapore selling rate is to be considered taking latest delivery on 31st
dollar 1,00,000 drawn on Singapore and payable 30 days July, the bill is expected to realize on 20th Sept which falls in
after sight with option over the month of july. The the fifth month from 8th May . The forward rate to the
following rates prevail in interbank market for US Dollar customer will be calculated based on 5th months forward US
Dollar/Singapore Dollar rate
Spot(8/5) USD1= Rs 72.4875/4925
US Dollar/ SGD Spot Selling Rate SGD 1.4078
Spot May 1600/1700
Add Premium 5 Months 0.0235
Spot June 3100/3200
SGD 1.4313
Spot July 4600/4700
Spot Aug 6100/6200 US Dollar is at a premium against rupee. Earliest delivery
Spot Sept 7600/7700 under the forward contract is on 1st July. Usance period of 30
Spot Oct 9100/9200 days and transit period of 20 days ,add up to 50 days making
20th August the due date of the bill. This will be rounded of to
At Singapore market US Dollar is quoted as the lower month and the exchange rate to the customer will
Spot (8/5) USD1= SGD 1.4004/4078 be based on Spot July rate for US dollar in the interbank
1 month forward 70/75 market.
2 months forward 110/115 US dollar/Rupee spot buying rate Rs72.48750
3 months forward 150/155 Add: Premium for July Rs 0.46000
4 month forward 190/195 Rs72.94750
5 month forward 230/235 Less: Exchange Margin@0.10% Rs 0.07294
6 month forward 270/275 Rs72.87456
Transit period is 20 days. Exchange Margin :0.10% Forward buying rate forDOSGD = (72.87456/1.4313)
NOT SHARE WITH ANY BODY OUTSIDE THE CAMPUS
Quote the rate =Rs50.91494 (As per FEDAI=Rs50.9150) 10
One import customer requests on 20th Feb to book a US Dollar is quoted at a discount against CHF in
forward contract to cover an import bill for CHF forward market. Since buying rate is to be reckoned
1,00,000,delivery April.. The following rates prevail in for this leg of the transaction, the latest delivery date of
interbank market for US Dollar
30st April will be taken. This falls under third month
Spot(20/2) USD1= Rs 72.2575/2625 from 20th Feb.
Spot March 875/900
Spot April 1200/1300 US Dollar/ CHF Spot Buying Rate CHF 0.8840
Spot May 1900/2000 Less: Discount for 3 months 0.0300
Spot June 2500/2600 CHF 0.8540
Spot July 3200/3325 US Dollar is quoted at a premium against rupee. Since
Spot Aug 3725/3800
this is a sale transaction, late delivery will be taken.
Assuming US dollars are quoted in Singapore market The forward rate to the customer will be based on Spot
against CHF as under: April selling rate in the interbank market.
Spot (20/2) USD1= CHF 0.8840/8850 US dollar/Rupee spot selling rate Rs72.2625
1 month forward 100/95 Add: Premium for April Rs 0.1300
2 months forward 200/195 Rs72.39250
3 months forward 300/295 Add: Exchange margin for TT selling Rs 0.10858
4 months forward 400/395
rate at 0.15% on Rs72.3925 Rs72.50108
5 months forward 500/495
6 months forward 600/595 Add: Exchange Margin for bill Rs 0.14500
selling rate @0.20% on Rs72.50108 Rs 72.64608
Exchange Margin on TT selling Rate:0.15%
Exchange Margin on Bill selling Rate:0.20% Forward bill selling rate for
DO NOT CHF
SHARE WITH = (72.64608/0.8540)
ANY BODY OUTSIDE THE CAMPUS
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Quote the rate =Rs85.06567 (As per FEDAI=Rs85.0650)
GOOD
WISHES
TO ALL
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