Introduction
Long dated foreign exchange forward trading is a forward foreign exchange transaction with the value date one year later. The customer purchases one currency from the bank and sells another currency on the settlement day which is designated by the customers.
Features
Customers applied the bank for purchasing one currency while selling another one on a certain exchange rate agreed in the contract on the designated day of settlement , so as to realize the conversion between the two foreign currencies.
The forward rate can be confirmed on the trading day to fully lock the potential risks of foreign exchange rate.
Target Customers
1. The product is applicable to customers with the need of future foreign currency conversion. For example, it meets the need of import and export trade settlement or foreign currency debt borrowing, and so on.
2. Customers are required to open foreign currency accounts in the bank.
Process
1. Agreement Signature: before conducting the interest rate swaps with Bank of China, customers need to sign the General Agreement of Derivative Transactions and Application for Foreign Exchange Trade with the bank;
2. Deposit implementation: The credit line or corresponding margin should be implemented.
3. Inquiry: Customer should inquire Bank of China about the price by providing all the transaction details in the form of application in writing.
4. Completion of the transaction: Once the transaction is concluded, Bank of China should provide the customer with authentication letter on transaction.
5. Settlement: the actual settlement should be carried out on the settlement day. According to actual demands, applicants may require the bank to unwind the transaction or conduct an extension before the settlement day.
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