Bank DnB NORD Polska offers its customers modern financial instruments to hedge currency risk: forward / non-deliverable forwards and currency swaps.

 

Foreign currency forward transactions (forward / non-deliverable forward - NDF) – purchase or sale of a specific currency amount on a specific day in the future at a price agreed when the transaction is closed. This makes it possible to hedge the currency risk and future income and expenses connected with the currency transaction can be precisely determined (hedging the actual foreign currency flows of imports/exports). In addition, active currency risk management is possible, without having to swap nominal amounts.

 

The forward is a foreign exchange transaction with actual payments – on the settlement date the nominal amounts in the two currencies are swapped. On the other hand, a Non-Deliverable Forward (NDF) is a foreign currency forward transaction without actual payments (no delivery) – on the settlement date there is no swap of the nominal amounts. Rather the difference between the forward rate is calculated on the date the forward transaction is closed and the current rate calculated by the foreign exchange trader. The bank allows the selection of the calculation method for the foreign exchange forward transaction. The customer decides whether the forward transaction is calculated with delivery (forward) or without (non-deliverable forward – NDF) on the day the transaction is settled.

Bank DnB NORD Polska makes forward transactions from EUR 50,000 or the equivalent in other currencies.

 

A currency swap is the exchange of a foreign currency amount in one currency to another currency for a specific period. When the transaction is concluded, the two parties agree at which price the swap from one currency into the other takes place and the return on an agreed date in the future.