Efficient way to manage FX exposures
| This is a structured product involving derivatives. The investment decision is yours but you should not invest in the "Asian Non-Deliverable Forward (NDF)" unless the intermediary who sells it to you has explained to you that the product is suitable for you having regard to your financial situation, investment experience and investment objectives. |
Product Information
- Non-Deliverable Forwards (NDFs) are conceptually similar to forward foreign exchange contracts; the difference is that they do not require physical delivery of the non-convertible currency
- A (notional) principal amount, forward exchange rate and forward date are all agreed at the contract's inception. At maturity, the difference between the contracted forward rate and the prevailing spot rate is settled in the convertible currency
- NDFs are cash-settled currency forwards which provide an offshore mechanism to hedge currencies which were previously consider "unhedgeable" either due to emerging markets suffering from illiquidity or regulatory/settlement constraints
- NDF is an asset-efficient method of managing FX exposures since there is no actual exchange of principal funds
- The contracts are devoid of country or local market risk as NDFs are not conditional upon the FX regime being maintained (apart from the fixing at maturity)
- When trading in NDFs, there is no withholding tax and no custody requirements, unlike trading in securities
- There is no bid/offer spread on maturity as the contracts are normally settled against a fixing rate
Rates
- NDFs are quoted to 12 months (these may differ due to liquidity). We offer this facility for the following Asian currencies:
- Chinese Renminbi (CNY)
- Indian Rupee (INR)
- Indonesian Rupiah (IDR)
- New Taiwanese Dollar (TWD)
- Philippine Peso (PHP)
- South Korean Won (KRW)
Contact Us
If you would like to apply for any of the above products or require more information about them, please:
