Non-Deliverable Forwards

When is this service right for you?

• When you need to hedge currency exposures from countries that have foreign exchange control where access to the local forward markets are restricted to domestic companies only

How to request a Non-Deliverable Forwards

• You will need a FX Contract Limit together with an ISDA agreement in place (except for USD/RMB NDF with transaction amount up to USD 5m and tenor up to 1 year).

Features and benefits

• A simple way for you to hedge against foreign exchange risk
• Unlike the deliverable contracts, NDF only settles the difference between the onshore official fixing and the NDF rates at contract maturity date. Customer either pays to the Bank or receives from the Bank the difference depending on the onshore official fixing at contract maturity. The customer could then buy/sell the same currency in the onshore market to fulful the physical currency requirement. Effectively, the customer is buying/selling the onshore currency at the offshore NDF contract rate.
• Customer should have a view on the movement of the foreign currency against his/her home currency before deciding whether he/she should book a forward exchange contract (deliverable or non – deliverable). The hedge will be costly if his/her view on the foreign currency movement is wrong.

Other useful information and services

• Foreign Exchange Risk Management
• Telegraphic Transfer
• Foreign Exchange Rates Information

Disclaimer
The information contained herein is derived from sources we believe to be reliable, but which we have not independently verified. HSBC makes no guarantee as to the accuracy or completeness of this information and is not responsible for errors of transmission of factual or analytical data, nor shall it be liable for damages arising out of any person's reliance upon this without notice. The information contained here is neither an offer to sell or the solicitation of an offer to purchase or subscribe for any currency or related instrument or other investment instrument and is intended for institutional customers and is not intended for the use of private customers. The information contained here is intended to be distributed in its entirety. No consideration has been given to the particular investment objectives, financial situation or particular needs of any recipient. Unless governing law permits otherwise, you must contact a HSBC Group member in your home jurisdiction if you wish to use HSBC Group services in effecting a transaction in any investment mentioned in this website.