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Foreign exchange protection clause

2023/2/25 1:45:08  Classification:   Participation: 9  

Foreign best forex rebate protection rebates cashback forexforex (AgreementOnExchangeGuarantees) What bestforexrebate a rebatemeaninginforex exchange protection clause Foreign exchange protection clause, also known as foreign exchange protection agreement, refers to the provisions of a particular country or several currencies as the rebateinforextrading value of the currency or payment currency of the protection clause foreign exchange protection clause is currently the most used value protection clause, its use of the scope of increasingly According to the number of currencies involved, it can be divided into "single foreign exchange preservation clause" and "compound foreign exchange preservation clause" 1. The currency of the foreign exchange preservation clause is characterized by the use of only one countrys currency to avoid or mitigate the exchange rate risk, therefore, the value of its role is very limited, and for both parties, often is not equal, asymmetric With the continuous emergence of other preservation clauses, the role of the single foreign exchange preservation clause and the use of the scope of increasingly narrow according to the currency affiliated to the country to distinguish, single foreign exchange preservation clause can be divided into Single gold reference clause also known as "indirect gold valuation clause", that is, the provisions of the contract value of the currency or the currency of payment of the gold value of the provisions, if the contract currency gold content changes, the contract payments or loans should be adjusted accordingly in the fixed exchange rate system has not collapsed before, international trade contracts, international investment contracts, international loan agreements, international economic assistance agreements. International loan agreements, international economic assistance agreements are often prescribed gold reference clause to eliminate or reduce the exchange rate risk 2. compound foreign exchange protection clause is to provide for more than two specific national currencies or mixed currencies as the contract value currency or payment currency foreign exchange protection clause compound foreign exchange protection clause can use or mitigate the exchange rate risk, the value of its role is more significant, the effect is better so in recent years, the international economic contract In recent years, the use of compound foreign exchange protection clause in the economic contract is more and more it is divided into "multi-currency clauses" and "mixed currency clauses" the use of foreign exchange protection clause In recent years, foreign exchange protection clause in Chinas import and export business has gradually been applied, for example, I a For example, an enterprise imported a set of equipment from Germany, the payment for 50 million German marks when the two sides agreed to the German mark, the U.S. dollar payment at the time of signing 1 U.S. dollar to 2.20 German marks, equivalent to about 22.7 million U.S. dollars, half a year later when the German mark up to 1 U.S. dollar to 1.80 marks, equivalent to about 27.8 million U.S. dollars if not to take any countermeasures to avoid exchange rate risks, our enterprise to lose 5.1 million U.S. dollars, but because the enterprise in the contract with foreign investors, added the foreign exchange preservation clause as a precautionary measure, the payment for imported equipment from 50 million marks adjusted to 45 million adjustment process formula: 2 × (5000 ÷ 2.20) / (0.4545 + 0.5555) = 4500 marks we need to pay 25 million U.S. dollars to buy the mark, more than the contract need to The German side received 45 million marks, 5 million marks less than the original payment, a loss of about 10% of the average share of both sides of the exchange rate risk losses Another example is that a company signed a trade contract to export a certain commodity to a British importer, agreed to use the price of the yuan, the pound sterling payment signed the contract, the exchange rate of the yuan against the pound sterling is 1 yuan peoples market to 0.20 The total amount of the transaction was 400,000 yuan, equivalent to 80,000 pounds at the time of the contract, but at that time, the pound had been falling, so we proposed to add a foreign exchange preservation clause in the contract, the export of goods in two shipments, the letter of credit is also divided into two open, agreed with the foreign businessmen, the foreign exchange preservation clause stipulated in the contract is, each batch of goods shipped half a month before the British importer to open a letter of credit in pounds, according to However, before each letter of credit, the British importer shall notify us by telegram of the exchange rate of RMB to GBP, requesting confirmation of the sharp fall in the exchange rate of GBP from the signing of the contract to the completion of the contract, the first time when the British importer opened a letter of credit in GBP, the exchange rate of RMB to GBP was 1 yuan to 0.21 GBP. The first time the British importer issued a letter of credit in pounds sterling, the exchange rate of RMB to pounds sterling was 1 yuan to 0.21 pounds sterling, and the delivery amount was 240,000 RMB, equivalent to ￡50,400 pounds sterling. No change, but because of the use of foreign exchange preservation clause, we received the amount of pounds, from the contract when the ￡ 80,000 to adjust to ￡ 8.64 million, more than 6,400 pounds, to make up for the loss of the export of pounds to make up for the loss of foreign exchange preservation clause of export enterprises In the export contract amount is large, the payment period is long, and the importer insisted on paying in soft currency; or expected from the transaction to the receipt of the period of valuation If the currency has a tendency to fluctuate downward during the period from the transaction to the receipt of the foreign exchange, then consideration should be given to the conclusion of the foreign exchange preservation clause in the export contract in which it is mainly stipulated that the coins used for valuation and the soft currency used for payment, as well as the amount to be paid when the payment is due to be converted according to the prevailing price of the currency of valuation and the currency of payment. The choice of matters often agreed in the contract payment terms, but this for the prevention of foreign exchange risk to the parties to cause possible losses or far from enough because the exchange rate is constantly changing, if the contract to choose the currency appreciation, to the detriment of the buyer; contract currency devaluation, to the detriment of the seller, so regardless of the devaluation or appreciation of the contract to the implementation of the negative impact of this is the international trade contract exchange rate risk because of the countries Most of the currency floating exchange rate, this risk is always possible, therefore, the parties to the contract have to use foreign exchange protection measures to deal with this risk international trade contracts in the foreign exchange protection clause is the specific performance of this measure contract foreign exchange protection clause often provides for a kind or a group of value of the currency and the contract currency exchange rate, such as the actual payment of the contract exchange rate changes more than a certain range, then according to The exchange rate at the time of payment is adjusted to achieve the purpose of value preservation

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