Transaction Derivatives


FX FORWARD

FX Forward is a sale or purchase transaction of a currency against other currencies for which delivery of funds is made more than 2 (two) working days from the transaction date.

Benefits

  • Provides certainty for money value in the future making it easier in making the Company's cash flow.
  • Purchase or sale of various foreign currencies that can be done by submission in the future (more than two working days).
  • Available in various currencies (USD, EUR, GBP, CAD, CHF, JPY, AUD, SGD, HKD, SAR, CNY, and other currencies as long as the price is available in the market).

PAR FORWARD

Par Forward is a series of forward transactions, in the form of purchase or sale contract of agreement to exchange a series of future cash flows from one currency to another using the same exchange rate.

Benefits

  • Available in various currencies (USD, EUR, GBP, CAD, CHF, JPY, AUD, SGD, HKD, SAR, CNY, and other currencies as long as the price is available in the market).
  • As a means of hedging against market risks.
  • Provides money value making it easier to create Company cashflow.
  • Allows customers to conduct transactions with different maturities but use the same exchange rate.
  • Transaction period unnecessarily follows a certain interval, but can be arranged according to customer's cash flow needs.

DOMESTIC NON-DELIVERABLE FORWARD (DNDF)

DNDF is a standard (plain vanilla) foreign exchange derivative transaction against rupiah in the form of Forward transaction with fixing mechanism conducted on the domestic market.

Benefits

  • Provides alternative hedging instruments to mitigate market risk along with the obligation to hedge domestically.
  • Available in various currencies as long as using settlement currency in rupiah, except MYR and THB.
  • Transactions uses fixing mechanism, so that the transaction settlement is without principal funds movement, by calculating the difference between the Forward transaction rate and the reference rate on a certain date specified in the contract (fixing date).

FX SWAP

FX SWAP is a transaction that exchanges a fixed amount of one currency with another currency, at an agreed exchange rate and simultaneous agreement to exchange back the same amount of the first currency against a second currency at a later date.

Benefits

  • Available in various currencies (USD, EUR, GBP, CAD, CHF, JPY, AUD, SGD, HKD, SAR, CNY, and other currencies).
  • Provides certainty and liabilities for present and future money value.

Cross Currency Swap (CCS)

CCS is an agreement between two parties to exchange a principal amount and interest payment in different currencies. Principal exchange uses the rate at the commencement of transaction.

Benefits

  • Flexibility for customers to switch liabilities from one currency to another.
  • Allows customers to take loan in a foreign currency that provides the best term.
  • Can be used to hedge exchange rate movements and interest rates.

INTEREST RATE SWAP (IRS)

IRS is an agreement between two parties to exchange interest payment series (fixed to float, float to fixed, or float to float) in the same currency.

Benefits

  • IRS is performed to hedge credit/liability exposure from interest rate movements.
  • Efficiency and flexibility of a customer's financial profile can be adjusted to Company's cash flow needs.
  • IRS transaction is made in private agreement, so other party cannot know the transaction that has been agreed both in cash flow and profit loss.
  • Customers can adjust the float and fixed composition of their assets or liabilities.

FX OPTION

FX Option is an agreement to provide the right to buy (call option) or sell (put option) a nominal amount of certain currency for the future at a predetermined price.

Benefits

  • As a means of hedging over exchange rate movements.
  • Buyer (option holder) obtains an unlimited profit potential and maximum loss potential only as much as the premium paid.
  • Get exchange gains, capital gains, and higher potential returns.

CALL SPREAD OPTION (CSO)

CSO is a combination of buying call option and selling call option carried out simultaneously in one contract transaction with different strike prices and the same nominal.

Benefits

  • As a means of hedging from market risk, both in terms of assets and liabilities, with more efficient costs.
  • Available in various currencies (according to the policy scope of Treasury business, including rupiah).

SERIES OF CALL SPREAD OPTION (SERIES OF CSO)

Series of CSO is a contract for a series of CSO transactions for a certain period with the same strike price.

Benefits

  • As a means of hedging from market risk according to a predetermined schedule.
  • A customer can make an agreement consisting of several CSO transactions.
  • Ensuring that the receipt of income or payment of foreign currency obligations over a period is within the acceptable exchange rate for customers.