Michael Finney, CEO of US-domiciled Deltrix Lumberjack, pitched his company's logging equipment to an Indonesian logging firm. Indonesian regulation required all quotations to be denominated in Indonesian Rupiah (IDR). Amidst intense competition, Michael improved his quotation from IDR equivalent to US$4.85 million, to that equivalent to US$4.70 million. This would result in a razor-thin margin for the company as a mere 10% depreciation of the IDR could wipe out Deltrix's US$ profits for this transaction. Michael tasked his treasurer, Dan Martin, to study the recent trend of the US$-IDR exchange rate and to recommend whether Deltrix should hedge the IDR receivables, due six months later, if Deltrix's tender was successful. And if Dan's recommendation was to hedge, whether hedging using the onshore or offshore IDR forward market would be more effective. Offshore hedging would be executed via the IDR Non-Deliverable Forward (NDF) market. A NDF, unlike the traditional forward transaction, would not involve exchange of principals in the two currencies. NDFs were settled via the payment of a Settlement Amount (similar to profit of forwards), which together with the spot transaction to be effected at maturity, would result in a (non-perfect) hedge of the amount of US$ to be converted.

【書誌情報】

ページ数：10ページ

サイズ：A4

商品番号：HBSP-NTU235

発行日：2018/11/18

登録日：2019/9/4