Instruments of protection against currency risk

Our bank offers the following products for protection of its customers against risk of fluctuations in the FX exchange rate

1. TERM BUYING AND SELLING OF FOREIGN CURRENCY – FORWARD

Term buying and selling of foreign currency (forward) is a transaction in which the two parties have agreed to make buying and selling of foreign and national currency on the agreed date in the future at a pre-agreed exchange rate (forward rate)

Prerequisites:
-    Singing of the Forward Master Agreement
-    Setting the limit
-    Minimum transaction amount EUR 50,000
-    Term of agreement up to 6 months

FX covered forward (quasi forward) is a transaction in which the bank and the customers agree to make buying and selling of foreign and national currency, whereat the customers shall pay RSD equivalent on the same date when the transaction is agreed, and the Bank will provide the equivalent of foreign currency on the agreed date in the future.

Prerequisites:
-    Minimum transaction amount EUR 50,000
-    Term of agreement up to 12 months

Product benefits – Term agreement enables the importer/exporter to fix the exchange rate, which is then applied in buying and selling of foreign currency.  In this way, the importer can eliminate the risk of change in foreign currency exchange rate when calculating the price of product; the products in question also enable the exporter to have exact insight of Dinar counter-value that will be gained based on realized deal.

2. CURRENCY CLAUSE DINAR DEPOSIT

Customers are offered the possibility to time-fix their available RSD funds to a period agreed with the Bank and to protect value of their deposits in case of Dinar depreciation during the term period. Interest is calculated at the interest rate for the currency in which such deposit is indexed. NBS middle rate applied on the date of depositing/withdrawal shall be applied when the customer is depositing / withdrawing the deposited funds and for calculation of Dinar counter-value of the currency clause deposits.

Product benefits – Deposited funds are protected from Dinar depreciation