Foreign exchange risk

Foreign currency exchange risks are an important factor for anyone trading in international currencies. Importers and exporters can be greatly affected by fluctuations in foreign currency from one day to the next.

What is foreign exchange risk?

Businesses without commercial contracts expressed in domestic currency (or fixed by an agreed rate of exchange) are fully exposed to exchange risk. Exchange risk may arise because of exchange rate movements in the period from the original commercial contract to the time of settlement of the domestic equivalent of the foreign currency amount.

ANZ provides solutions to mitigate exposure to foreign exchange risk

Foreign currency accounts

• Accounts denominated in a major foreign currency that provide the benefit of natural hedge through payables and receivables.

Foreign exchange contracts

• To provide protection against unfavourable currency movements, these provide for the purchase or sale of one currency against another, where the rate of exchange is fixed at the time the contract is entered into for physical delivery at an agreed future date.

Foreign currency options

• For added flexibility, foreign currency options provide a fixed exchange rate for a future date that can be used if rates move unfavourably, but give you the option of using the prevailing spot rate for that date if exchange rates have moved favourably. For this right to choose, you will pay a premium at the outset.

More information

For foreign exchange risk solutions, contact us to be referred to a relationship manager.

For businesses with turnover $5M to $40M

Business Direct Centre

 Ph: 1800 801 485 - 8am-8pm (AEST) weekdays

For corporates and large corporates with turnover more than $40M

 Email Corporate Banking

 Ph: 1300 883 798
 Intl: +61 3 9601 1260

This product/service is suitable for businesses of all sizes.