FORWARD FOREIGN EXCHANGE-i
Forward Foreign Exchange-i (FX-i) is an Islamic facility available to EXIM Bank’s Customers who are exposed to foreign exchange risks in their normal business. The facility is to be tagged with a financing facility such as Overseas Project-i/Contract Financing-i, Buyer Financing-i, Overseas Investment Financing-i, Import Financing-i, Supplier Financing-i, Term Financing-i and Trust Receipt-i or other related facility. Principally the product is aimed at supporting Customers transactions in mitigating their foreign exchange risks.
Forward Foreign Exchange-i
- To provide a Shariah compliant currency hedging to Bank’s customer
- To enable the customer to sustain stable earnings and protect the risk against adverse fluctuation in exchange rate
The Shariah concept applicable to Forward Foreign Exchange-i are:
The Customer must have a main financing facility with EXIM Bank such as Overseas Project-i/Contract Financing-i, Supplier Financing-i, and Term Financing-i etc. The facility will be for business purposes and not for speculation. Detailed information can be referred to Product Disclosure Sheet
The exposure limit shall be 10.0% of the total principal financing facility that is attached to this line. However the customer may use up to 10 times of the exposure limit.
Each contract shall be for a duration of up to six (6) months and extendable for another three (3) months.
To be determined by EXIM Bank at the point of utilization.
United States Dollars, Euro and other acceptable currency.
Upon maturity of the contract duration of six months the customer shall liquidate the contract by taking delivery of the foreign currency contracted or alternatively an extension of the Contract Period may be allowed for a maximum of three (3) months provided that the prevailing market rate is contained within the ten percent (10%) band of the original Forward Rate.