Currency Risk Management

Are You Aware of the Foreign Exchange Risk You are Facing?

Volatilities in foreign exchange rates could make the operating cash flow of your business became unstable. Your company could be faced with foreign exchange risk regardless of its size. To properly manage the foreign exchange risk, you should understand the risks of currency fluctuations. The main business elements of foreign exchange risk include:  

  • import or export invoices or receipts quoted in foreign currencies
  • loans denominated in foreign currencies
  • overseas investments denominated in foreign currencies
  • converting overseas profits to local currency
  • settling in foreign currencies

You Need to Manage Your Foreign Exchange Risk

Fluctuations in the foreign exchange market could affect a company's cash flow and profits. Proper management of foreign exchange risk could help the company to lock in the costs and revenues so as to stabilise the earnings.  

BOCHK is Your Premier Choice

BOCHK, with the extensive network of cross-border services and the professional team who is familiar with the Mainland and Hong Kong markets and regulations, together with the close business linkages with our parent Bank of China Limited, provides you with diversified RMB products and comprehensive financial solutions.

BOCHK, as the sole Clearing Bank for RMB in Hong Kong, has been working closely with the People's Bank of China ("PBOC") and Hong Kong Monetary Authority ("HKMA") to implement, optimise and enhance the operation of RMB business under the policy guidance of both regulatory authorities. We are committed to providing professional and leading RMB clearing services with our mission to reinforce Hong Kong's status as the offshore RMB business centre.

Based on our thorough understanding of your business needs and analysis of the global foreign exchange market, BOCHK will offer you suitable products and strategies for foreign exchange risk management. Our products include:

  • FX Spot
  • FX Forward
  • Non-deliverable Forward
  • FX Option
  • Cross Currency Swap
  • Structured Forwards

You should read and understand the Bank's Conditions for Services and all of the offering documents including the relevant term sheet, Important Facts Statement etc before deciding whether to use the above product(s) for hedging purpose.

Your Company is Exposed to Foreign Exchange Risk? Hedge or Not?

For more information, please contact us now via the following channels:

  • Call +852 2537 2997
  • Email
  • Contact your BOCHK account manager

Important Notice

The following risk disclosure statements cannot disclose all the risks involved. Prior to trading or investment, you should collect and study the information required for your investment. You should carefully consider whether trading or investment is suitable in light of your own financial position and investment objectives. You should seek independent financial and professional advice before trading or investment. If you are uncertain of or have not understood any aspect of the following risk disclosure statements or the nature and risks involved in trading or investment, you should seek independent advice. The above information are for reference only and does not constitute any offer, solicitation or recommendation to buy, sell or provide any investment product or service.

Risk Disclosure Statement

  • Credit and insolvency risk: The above products are not backed by any collateral. The settlement of the contract is subject to the credit and insolvency risk of BOCHK. Should BOCHK becomes insolvent or go into liquidation or default on its obligations, you will be ranked as an unsecured creditor of BOCHK and may lose your entire investment, regardless of the movements in the underlying exchange rate or the terms of the product.
  • Market risk: Returns on the above products are dependent on movements of the underlying currencies' exchange rates. Movements in exchange rates can be unpredictable, sudden, drastic and affected by financial, economic, political factors as well as intervention by central banks or other bodies. You will be subject to risk of loss due to fluctuations in exchange rates.
  • Risks relating to RMB: RMB investments are subjects to exchange rate fluctuations which may provide both opportunities and risks. The fluctuation in the exchange rate of RMB may result in losses in the event that the customer converts RMB into HKD or other foreign currencies. RMB is currently not fully freely convertible. Corporate customers who intend to conduct conversion of RMB through banks may occasionally not be able to do so fully or immediately, for which it is subject to the RMB position of the banks and their commercial decisions at that moment. Customers should consider and understand the possible impact on their liquidity of RMB funds in advance.
  • No secondary market: The above products are not listed on any exchanges and there is no secondary market for you to sell the above products prior to their expirations.