Treasury Services for Efficient Financial Management

Contracts, Swaps and Options

Our Treasury team will tailor a foreign currency transfer, whenever and however you need it at and always at the best possible rates for your business.

Spot and Forward Contracts

A spot trade is the instant purchase or sale of a foreign currency or commodity. Spot contracts are the most common type of currency transfers. With a spot trade you can:

Trade in more than 25 currencies
Manage quick overseas or cross-currency payments or receivables

As a business, you want to avoid risks and uncertainties that are associated with exchange rate movements. A forward contract helps you do this by arranging to transfer money at a future date and at an exchange rate that is agreed beforehand. With a forward contract you have:

A hedging tool that does not involve any upfront payment
The certainty of execution on a rate and maturity date agreed beforehand

Swaps

If you are looking for a foreign currency loan at a better interest rate than you could obtain by borrowing directly in a foreign market, you need a currency swap. With a currency swap you can exchange the principal amount of a loan and the interest payable on it in one currency for the principal and interest in another. By setting up a currency swap you:

Agree the exchange of a principal amount at the spot rate
Swap back the principal at either the prevailing rate or the spot rate or at a pre-agreed rate
Can manage your cash flows better

An interest rate swap allows you to agree to exchange the future interest rate payments you make over a set period on loans or bonds. LIBOR is the benchmark for floating short-term interest rates and is set daily. With an interest rate swap you:

Can manage your cash flows and interest rate risk better
Make no exchange of the principal

Currency Options

A foreign exchange option (commonly known as an FX option or currency option) gives you the right but not the obligation to exchange money from one currency into another at a pre-agreed exchange rate on a specified date. With such an option you:

Have the right to buy or sell without any obligation
Have the flexibility to decide whether to take up the option depending on circumstances
Pay an upfront premium for the option

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Forward Rate Agreement (FRA)

If you are looking to protect your business against future movements in interest rates, a Forward Rate Agreement, or FRA, is perhaps your best option. By entering into an FRA, you:

Lock in an interest rate for an agreed period starting on a future settlement date

Specify a principal amount

Hedge against future interest or exchange rate exposure

Structured Deposits and Notes

Emirates NBD offers you the benefit of both a deposit and an investment product with our Structured Deposit. Features of these deposits include:

The potential for higher returns compared to fixed deposits
May be taken in 'tranches' with either a fixed offer period or available until the tranche is fully subscribed (tranches may come with differing features and returns)
Returns may depend on the performance of the underlying investment product

Our Structured Note combines a bond (to protect your principal) and a derivative element. The bond makes up most of the investment (typically 80%), and the derivative element gives you exposure to potentially higher returns. Features of the note include:

Protection of your principal invested (if held to maturity)
Terms of between 18 months and six years
Higher potential returns than a simple deposit

Dual Currency Deposits (DCI)

An Emirates NBD Business banking dual currency deposit allows us to repay your deposit in a different currency at maturity. This is a short-term investment that offers you the possibility of receiving a higher return through moderate movements in exchange rates. Features of these deposits include:

Combination of a cash or money market deposit with a foreign exchange option
The capital and interest can be converted into an alternative currency
The more the risk the higher the potential yield
The yield depends on several variables including currency pair, term, market interest rates and volatility of currencies used

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