The aim of currency risks insurance is to protect against unfavorable changes in currency exchange rates.
What is currency risk
If the activity of the company is related to the import / export of products or services, or it attracts / places the loans / deposits in foreign currency, the company inevitably faces currency risk, ie she may experience losses due to adverse changes in foreign currency to the national.
What does the insurance of currency risks
Insurance currency risks can significantly improve the results of business, namely:
- • insured the risk of unfavorable changes in foreign currency exchange rate in relation to the national;
- • removed the uncertainty in obtaining future revenues, are more transparent financial flows;
- • in some cases, reducing the cost of attracted credit resources;
- • released funds of the company and increased manageability;
Examples of currency risk insurance:
The Company conducts its activities in Russia, takes a dollar loan of 1 million. USD. In order to insure the growth of the dollar to buy US dollar futures or call options on the futures. As a result, if the dollar will rise, and the cost of credit that should be given will increase, the company will profit from derivatives and compensates, so losses from the growth of the dollar.
The company operates in Russia and the production is exported abroad, and revenue received in US dollars. In order to insure the growth of the ruble is necessary to open a short position (short) futures on the US dollar, or buy a put option on this futures. As a result, if the dollar will fall, and revenues will decrease, the company will profit from derivatives and compensates, so losses from the growth of the ruble. Insurance currency risk allows to predict the ruble proceeds of the enterprise, regardless of the difficult to predict the behavior of exchange rates.
We offer an opportunity to insure the following assets:
The US dollar
With our service for exchange insurance, you will increase the sustainability of its business in a competitive environment.