Forward Exchange Transactions

Forward Exchange Transactions

Hedge your cash flow with Forward (Waad) transactions, stay safe from currency risks and deliver comfort to your business.

With Kuveyt Türk, you can carry out forward exchange transactions quickly and securely.

What are Forward Exchange Transactions?

Forward exchange transactions allow you to buy and sell products or services by fixing the exchange rate risk for a certain currency.

Features of Forward Exchange Transactions

The main features of forward exchange transactions are:

  • The contracts include the committed date, currency types, amount, and exchange rate information.
  • You can postpone the date of the contracts provided that you reach an agreement with the counterparty.
  • You can perform your forward transactions in two different types: cash-blocked and limited.
  • You can use two types of exchange rates in forward transactions, with and without reference.

Forward Transaction Limits

You can make forward transactions above USD 10,000 and below USD 1.5 million at Kuveyt Türk branches. You can also make transactions over USD 100,000 by obtaining a special referenced rate from Kuveyt Türk Treasury.

What are Forward Underlying Assets?

  • Foreign Exchange Forward – EURO/USD, Sterling/USD, Swiss Franc/USD, Japanese Yen/USD, TL/EURO, TL/USD, TL/Sterling, and other foreign exchange, and cross rates announced by the Central Bank of the Republic of Turkey
  • Precious Metals Forward – Gold, Platinum, Silver, Palladium, and other precious metals

Frequently Asked Questions About Forward Exchange Transactions

Which types of traders prefer to trade forwards?

Forward transactions are mostly concluded between banks and customers.

Are forward contracts transferable?

The principle of good faith is taken as the basis for the establishment of forward contracts. Due to these features, Forward contracts cannot be transferred to third parties.

What is the difference between forward and option transactions?

Forward transactions are based on forward contracts on foreign exchange and commodities. In option transactions, besides foreign exchange and commodities, the stock index can also be the subject of the contract. Option contracts also provide obligations to the seller and rights to the buyer.

What is the difference between forwards and standard futures?What is the difference between forwards and standard futures?

In forward contracts, there is an obligation to wait until the expiry date. In standard forwards, there is no obligation to wait until expiry. In Futures transactions, you can close the position you have opened as an investor at any time.