Currency Risk Management
Leaving currency exposures unhedged is a risky strategy for profitability in todays volatile markets. Clients can choose from a range of solutions to manage and hedge currency risk.
Forward contracts:
Forward Contracts are simple yet effective solutions to hedge currency risk. A forward locks the exchange rate at a future date, thereby hedging the risk of exchange rate movement. This allows companies to budget and plan the exchange rate for future payments.
FX Swaps:
An FX Swap is a simultaneous purchase and sale of identical amounts of one currency for another with different value dates (normally spot to forward).
FX Swaps: allow companies to utilize the funds they have in one currency to fund obligations denominated in a different currency, without incurring foreign exchange risk. It is an effective and efficient cash management tool for companies that have assets and liabilities denominated in different currencies.
Foreign exchange options:
Currency options are contracts in which the option buyer has the right to buy or sell the underlying currency at a specified exchange rate on a specified date.
The option buyer pays a premium for buying the option, with the maximum downside in plain vanilla options being limited to the premium paid by the option buyer. While the option seller has the obligation to sell (or buy) a certain amount at an agreed rate on the future date. .
Currency options can be also be structured according to the company’s requirements to execute their market view or to hedge currencies due to their underlying business requirements. .
We can offer bespoke structures to match payables/receivables cash flows according to the desired risk profile and hedging objective. .
Foreign Exchange
Al Masraf offers customers competitive pricing for foreign currency transactions in all maj Al Masraf offers customers competitive pricing for foreign currency transactions in all major International & Regional currencies. We leverage our International network and correspondent banking relations to offer faster execution & delivery of foreign exchange services. Our team of Treasury professionals provide client coverage from our offices in Abu Dhabi and Dubai.
Interest Rate Risk Management
• Companies are highly motivated to reduce interest rate risk to protect profitability.
• Interest rate swaps (IRS) offer a mechanism to transfer a fixed rate obligation into a floating note or vice versa.
• A company that has a loan linked to a floating rate benchmark (LIBOR/EIBORIQIBOR/EURIBOR) runs the risk of rise in borrowing costs in a rising interest rate scenario.
• An Interest Rate Swap helps ensure stability of cash flows, hedge against rise in interest rates and stability of profitability and manage cost of borrowing.
Commodity Risk Management
Al Masraf provides customers solutions to hedge underlying exposures in Energy, Metals and other commodities. Commodities can be hedged using Forwards, Swaps & Options.
Fixed Income
Al Masraf is an active player in the Regional Fixed Income market. Our Fixed Income team has several decades of collective experience in trading and investing in fixed income markets.
We provide access to markets across the globe and offer bonds and sukuk’s denominated in various currencies. We actively make markets in Regional securities and can execute secondary market trades on behalf of our clients in almost all listed / unlisted securities.
Al Masraf also provides custody services for fixed income securities.
Time Deposits
We offer competitive rates for time deposits in G10 and GCC currencies across various tenors.
Bank Notes
We offer a wide range of currency notes in USD, GBP, EUR and GCC currencies through our branch network.
