Business in any currency
We offer a full array of foreign exchange services enabling you to conduct business anywhere in the world. Consult with our Foreign Exchange specialists when denominating your payables and receivables in a foreign currency and see what a difference it can make.
As the most expedient means of transferring funds internationally, foreign wire transfers are cost effective and safe. They are also an efficient means of affecting payment. Foreign currency buy/sell exchange rates for wire transfers are better than any other delivery form, because electronic settlement is made in immediately available funds.
A forward contract is an agreement to buy or sell a specific quantity of foreign currency at a set exchange rate for delivery on a specified future date or within a certain period of time. The purpose of a forward contract is to hedge currency exposure.
When should you hedge?
- Before closing a sale, obtain a forward rate quotation for the currency in which the invoice will be denominated and the date or range of dates when payment will be received. This will protect the value of the sale when the currency is converted.
- For import letters of credit denominated in a foreign currency, arrange a forward contract to lock in a rate when the draft is payable. This will avoid having to pay more for the merchandise than originally anticipated.
Cash transactions in foreign currencies have declined over the years as better electronic alternatives, and with controlled exchange rates, allow you to travel without queuing up at exchange windows. Still, it is not practical to rely solely on a card for small purchases. We recommend that you purchase some currency in advance of your trip. Doing so will enable you to cover initial expenses such as taxi or train fare and other incidentals and eliminate the inconvenience of waiting in line at the airport exchange window when you arrive at your destination. How much? Carry as much cash as you are comfortable with, just as you would on a domestic trip.
For more information about our International Banking services, contact an International Banker.