Term buying and selling of foreign currency (Forward)


Currency forward contract

The longest possible date of forward processing is 12 months. In order to be able to conclude the forward transactions with Banca Intesa, it is necessary that the client does the following with his client manager at the bank:

  • sign General Contract about currency forward where forward transaction is described in detail
  • agree the limit amount for nominal sum, term and type of currency where he would forward transactions.

Having fulfilled certain conditions, client performs forward buying and selling of currency in the same way as it is with normal (non term) transactions of buying and selling of foreign currency; that is the client:

  • contacts dealer of the bank
  • asks for the fee for certain type (buying or selling) and term of effecting forward
  • having received asked information he brings the decision whether to accept offered conditions
  • in case of accepting the conditions, concludes forward transaction
  • continues its dealings with completely eliminated foreign currency risk (for the sum on which covered forward is concluded)
  • on the date of effecting of the forward gets the purchased sum of foreign currency for disposal (that is effects payments in accordance with the law about Foreign currency dealing).
  • can conclude new forward transactions during duration of previously concluded.

Covered currency forward contract

Enables you to under better exchange rate purchase some of the currency from the currency list for dinars under which you make the payment of dinars equivalent value on the same day, and the selected currency you receive on the chosen future date. For confirming the Covered currency forward it is not necessary to sign neither the General contract nor making an agreement of the limit amount.

For confirming the Covered currency forward it is not necessary to sign neither the General contract nor making an agreement of the limit amount. The client:

  • contacts Banca Intesa dealer
  • asks for the fee for certain type (buying or selling) and term of effecting forward
  • having received asked information he brings the decision whether to accept offered conditions
  • in case of accepting the conditions, concludes forward transaction
  • continues its dealings with completely eliminated foreign currency risk(for the sum on which covered forward is concluded)
  • on the date of effecting of the covered forward gets the bought sum of foreign currency for disposal ( that is effects payments in accordance with the law about Foreign currency dealing).
  • can conclude new Covered forward transactions during duration of previously concluded.

Partial FX Forward Contract

This product enables the client to harmonize the purchase of foreign currency for future payments with the dynamics of their dinar inflows, i.e. to partially pay dinar amounts until the FX forward contract execution date, at which time the Bank pays into the client’s foreign currency account the purchased foreign currency. The exchange rate at which the client purchases the foreign currency as at the desired future date is in-between the currency and covered FX forward exchange rate and depends on the dynamics of the partial dinar payments. Partial forward contract due date is 6 months at most.
In order to conclude the partial FX forward contract, it is not necessary to sign the general agreement or to agree on the limit, while it is necessary that the first dinar payment be made on the date when the contract is concluded and that the amount paid is at least 10% of the total transaction value.

The client:

  • Contacts Banca Intesa dealer and requests the quoted price for purchase of foreign currency at a specified date;
  • In accordance with the client’s dinar liquidity inflow, the client proposes the amounts and the dates when those amounts, in dinar counter value, shall be paid according to the partial FX forward contract;
  • Discusses with the dealer several repayment schemes until they agree on the best dynamics of payment of the amounts in dinar counter value;
  • Upon accepting the offer, concludes partial FX forward transaction contract and receives a schedule with calculations in accordance with the amounts and dates of the agreed tranches;
  • Continues business operations having completely eliminated currency risk and pays each dinar tranche on specified deadlines;
  • Is obliged to pay into the Bank’s account the exact amounts in dinar counter value according to received repayment schedule before the due date;
  • On the partial FX forward contract due date, receives the purchased amount of foreign currency (i.e. the client can perform foreign currency payments in accordance with the Law on Foreign Exchange Operations).