Foreign Exchange Risk Management

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

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

When you’re dealing with foreign currencies, market fluctuations can present unexpected—and unfavorable—exchange rates. That’s why Webster offers forward foreign exchange contracts to help you hedge your exchange rate risk.

Depending on your company’s objectives, as well as market considerations, Webster can work with your company to customize a plan that fits your needs.

Forward Foreign Exchange Contracts Offer

  • An agreement to exchange one currency for another on a specific date in the future
  • A locked-in exchange rate, based upon the difference between the prevailing interest rates of both countries
  • The ability to establish a fixed USD value on your foreign currency cash flow
  • “Window” contracts to exchange currency within a specific time for more settlement flexibility

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 exchange amounts
  • 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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