Cash Flow Hedge (CFH) to Hedge Foreign Currency Risk 

 

In the case of a planned transaction in foreign currency, fluctuations in the foreign currency may result in the payment amount being greater than expected. You can hedge this risk with a cash flow hedge. The payment represents the exposure.

 

To map a hedging relationship, the following product types are provided for the hedging instrument:

●      Money market transactions: Fixed-term deposit, Commercial Paper, Interest rate instrument

●      Forward exchange transaction

●      Option on forward exchange transaction

●      Currency option collar

●      Cross currency interest rate swap

 

See also:

CFH: Fixed Term Deposit, Commercial Paper, or Interest Rate Instrument Used as a Hedging Transaction

CFH: Cap/Floor Used as a Hedging Transaction

CFH: Option on Forward Exchange Transaction Used as a Hedging Transaction

CFH: Currency Option Collar (Option Spread) Used as a Hedging Transaction

CFH: Cross Currency Interest Rate Swap Used as a Hedging Transaction

Cash Flow Hedge (CFH) to Hedge Interest Rate Risk