Average Rate Forward - ARF

This is a transaction intended for clients who will be exchanging available funds from one currency to another at some point in the future, but who do not know the exact dates and volumes of the individual transactions beforehand.

Benefits

You can hedge against exchange rate risk without knowing the exact dates or amounts of future transactions.

Get acquainted

When arranging a deal, you agree on the duration of the period, the total value of transactions, and the hedged rate.
During the agreed period however you will trade at the current exchange rate, settlement will be made at the end of the period
Developments of the foreign exchange rate during the hedging period are represented by central bank fixing every working day during this period. The ČNB exchange rate fixing for the day in question is reloaded for each working day during this period. The simple arithmetic average of the fixed-rate is calculated at the end of the period. This constitutes the average market rate traded for during the period in question. The difference between the hedged rate and the average of the fixed rates multiplied by the hedged scope equals the financial settlement between you and the bank.
Hedging applies to the overall contractual volume of all transactions for a given period, and not for each partial transaction. In the same way, settlement applies to the entire pre-arranged volume, regardless of the quantity that was actually converted during the period in question.

Terms of Use

You may use these transactions if you have a current account or personal account with us. The minimum amount for Average Rate Forward is the equivalent of 250 000 EUR. This amount is only approximate however and will depend on the duration of the hedging period.

The following is necessary for the transaction:

conclude a general agreement
set and approve the transaction limit.

Would you like to learn more? Call 844 117 711. The service is available on working days from 8.45 a.m. to 4.30 p.m.

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