imported>Doug Williamson |
imported>Doug Williamson |
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| ''Risk management - foreign exchange.'' | | ''Bank regulation''. |
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| A dynamic forward contract is a foreign exchange forward contract that provides additional flexibility to the party hedging its foreign exchange risk.
| | The part of the regulatory framework which is designed to enhance the safety and soundness of individual financial institutions, rather than the financial system as a whole. |
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| This effectively provides an option - or options - in favour of the hedger.
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| The option may be paid for by:
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| *An up front premium;
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| *An adverse forward rate in the contract, compared with the current market forward rate; or
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| *A combination of these.
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| :<span style="color:#4B0082">'''''Corporates act to mitigate FX volatility'''''</span>
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| :Payment fintech Moneycorp suggests a number of ways in which corporates can mitigate the impact of FX exposure...
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| :Make use of forward contracts: Forward contracts, either fixed or dynamic, can be customised to allow companies to lock an exchange rate for a future overseas payment.
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| :''Philip Smith, editor, The Treasurer online - 14 October 2022.''
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| == See also == | | == See also == |
| * [[Bilateral]] | | * [[Capital adequacy]] |
| *[[Contract]] | | * [[Macroprudential]] |
| * [[Deal contingent forward]]
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| * [[Derivative instrument]]
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| * [[Fixed forward contract]]
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| * [[Fixing instrument]]
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| * [[Foreign exchange forward contract]]
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| * [[Foreign exchange risk]]
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| * [[Forward contract]]
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| * [[Forward discount]]
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| * [[Forward exchange market]]
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| * [[Forward foreign exchange rate]]
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| * [[Forward margin]]
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| * [[Forward market]]
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| * [[Forward points]]
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| * [[Forward premium]]
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| * [[Forward price]]
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| * [[Forward rate]]
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| * [[Futures contract]]
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| * [[Hedging]]
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| * [[Risk management]]
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| * [[Risk response]]
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| * [[Transfer]]
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| [[Category:The_business_context]]
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| [[Category:Identify_and_assess_risks]]
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| [[Category:Manage_risks]]
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| [[Category:Risk_frameworks]]
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| [[Category:Risk_reporting]]
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| [[Category:Financial_products_and_markets]]
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