Hedging Technique - Forward Contracts
Tuesday, October 13, 2009
Query from Abdul Haseeb
I want to ask regarding hedging techniques, if a company import raw material and pay their debt after two months from receiving of goods by this means the company may bear exchange loss due to price fluctuation risk, In my opinion this... type of risk can be mitigate through hedging techniques such as forward contacts. Please let me know that forward contracts are permissible now a days?
Comment: No, These days State Bank of Pakistan does not allow to book forward rates against imports as this transaction was intentially used for forged transaction.
I want to ask regarding hedging techniques, if a company import raw material and pay their debt after two months from receiving of goods by this means the company may bear exchange loss due to price fluctuation risk, In my opinion this... type of risk can be mitigate through hedging techniques such as forward contacts. Please let me know that forward contracts are permissible now a days?
Comment: No, These days State Bank of Pakistan does not allow to book forward rates against imports as this transaction was intentially used for forged transaction.
posted @ 12:41 PM,
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