FX hedging

Hedging instruments

FX hedging instruments available in the market are based on the setting of a fixed price at which foreign currency is bought or sold on a specific future date (forward rate).

Forward contracts (Forex forwards)

Forex forwards are contracts to buy or sell foreign currency for dinars, with both currencies delivered on an agreed future date at an exchange rate agreed in advance (forward rate).

Covered forwards

Covered forwards are contracts to buy foreign currency under which a company deposits a part or total of the dinar equivalent value in advance and receives foreign currency on an agreed future date.

Forex swaps

Forex swaps involve simultaneous purchase and sale of two currencies at predetermined exchange rates, but at two different value dates.