Foreign Exchange Risk Management

In today’s unpredictable global marketplace, Webster can help you manage foreign exchange rates beyond spot contracts.

  • Fast Facts
  • Balances market fluctuations
  • Locks in rates in advance
  • Custom solutions available

When you’re dealing with foreign currencies, market fluctuations can always be a risk. That’s why Webster offers flexible forward foreign exchange contracts to help you hedge your exchange rate risk.

Depending on your company’s objectives, as well as market considerations, we’ll work with you to customize a solution.

Forward Foreign Exchange Contracts Offer

  • An agreement to exchange one currency for another at a specific date in the future
  • A locked-in exchange rate, calculated using the current spot rate and the prevailing interest rate differential between the two countries involved
  • The ability to establish a fixed USD value on a foreign currency cash flow
  • Window contracts for more settlement flexibility, allowing you to exchange currency within a specific date range

Keep in Mind

  • Exchange rates are determined by supply and demand for the applicable currencies, and reflect interest rate differentials, underlying political considerations, and economic fundamentals
  • A line of credit with Webster’s International Department must cover all expected USD exchanges
  • Foreign Exchange Contracts must link to a Webster Deposit Account

For more details on Foreign Exchange Risk Management, please call us at 1-888-578-2323, or email treasurysales@websterbank.com.

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