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Foreign Exchange for Business

If you buy and sell internationally, ASB's Global Markets team can help your business manage changes in exchange rates.

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Great reasons to choose us

  • Find the foreign exchange risk-management products best suited to your business
  • Make foreign currency payments online 24/7 with ease and convenience
  • Access foreign exchange market insights from ASB’s economists
  • Options to lock in exchange rates and payment dates
  • Hold funds in foreign currency ready for payment or conversion

Why manage foreign exchange rate risk?

If you trade overseas, it's important to remember that even small changes in an exchange rate can have a big impact on your profitability. That's because the difference in the total value of your deal comes out of your margin.

For example, imagine you're shipping $100,000 of goods overseas, at a 20% margin, so $20,000 profit. If the exchange rate drops 5%, you'll only receive $95,000. But your costs are locked in, so that $5,000 loss comes out of your margin. Instead of making $20,000 you only make $15,000. That 5% change cost you 25% of your profit.

Fortunately, there are lots of ways we can help you manage your exchange rate risk whether you're importing, exporting, or both.

How can we help manage your foreign exchange rate risk?

Foreign Currency Accounts

If you regularly make and receive overseas payments, a Foreign Currency Account can make life simpler. 

It lets you hold funds in your overseas currency, and make and receive payments without converting them first. It saves you exchange rate fees, and helps you manage your costs when exchange rates change. 

Topping up your account or converting funds to New Zealand dollars is as simple as making an online fund transfer. We take care of the conversion automatically.

Foreign Currency Term Deposits

If you're holding foreign currency for a future requirement, you can park them in an ASB Foreign Currency term deposit. You earn interest on the funds, and usually at a higher rate than in a standard Foreign Currency Account. 

Forward Exchange Contracts

Forward Exchange Contracts (FECs) lets you set the terms of a future transaction. You choose the date and amount, and we give you a guaranteed exchange rate. You can then proceed with certainty, knowing that your deal is locked in and can’t be affected by exchange rate changes.

Remember, the transaction is locked in. You have to proceed with the deal even if the exchange rate on the day is better than your agreed rate.

Foreign Exchange Options

An alternative to a locked in Forward Exchange Contract (FEC) is a Foreign Exchange Option (FX Option). Like an FEC, you choose a date, a currency and an amount, and we set an agreed exchange rate, sometimes called a 'strike rate'.

But unlike an FEC, an FX Option gives you the best of both worlds. On the transaction date you can choose to keep your agreed exchange rate, or back out of the deal if the exchange rate moves in your favour.

The only difference is that you pay a non-refundable premium upfront for an FX Option – this can be especially useful in volatile markets.

Foreign Exchange Orders

A Foreign Exchange Order (FX Order) lets you create an automated deal at an exchange rate and amount to suit you. When the rate reaches your chosen level, we automatically execute your order.

We monitor FX Orders from market opening on Monday morning NZT to Friday afternoon New York time.

Call Level

If you'd prefer to confirm your currency deal before it happens, a Call Level is right for you. You set your target exchange rate, and we monitor the markets. When the exchange rate hits your target, we confirm your order with you via phone or email before executing it.

As your business grows and becomes more complex, we can use more advanced tools to help manage your exchange rate risk. Many of these tools are unnecessary for small businesses, but perfect for large businesses. Talk to us today so we can suggest the best tools for your business' needs.

Contact us today

Call us

Get in touch with our Global Markets team today, call 0800 806 280.

0800 806 280

Any questions?

Email our Global Markets team today.

foreignexchange@asb.co.nz

We're here to help you

ASB's terms apply.

ASB is the issuer of the products mentioned above. 

A product disclosure statement (if applicable) and QFE disclosure statement is available on request and free of charge from your Global Markets dealer or Relationship Manager.

International business Foreign Exchange for business – Tools to manage risk | ASB