A large machinery and parts importer came to moneycorp after they realised the true financial loss of going through their high street bank.
The company had found a piece of equipment in Italy for a great price. As the company was based in the United States, they arranged for transportation and other necessary logistics to transfer the equipment. After an internal review, the machinery and parts importer realised they had incurred significant losses by exchanging the funds for the international payment using a spot rate from their regular bank.
With deals similar to the one made in Italy that would be worth millions increasing in frequency, the company needed to consider future costs and manage international transfers more economically.
Mitigating risk through forward contracts
moneycorp offered the company forward contracts for half of the necessary funds and the other half remained open to market fluctuations at spot rates. This ensure the machinery and parts company mitigated as much risk as possible with any large international payments in the future.
By implementing a customised risk management plan, the company enjoyed a significant cost saving and confidence that each deal was not a gamble when it came to foreign exchange.