Dhaka, Bangladesh (BBN)- HSBC has transacted the Bangladesh Taka (BDT)-U.S.
Dollar Option for the fist time in Bangladesh aiming to minimize customers foreign exchange risks in a volatile market.
The global financial giant transacted two US dollar-BDT options for Viyellatex, a local readymade garment exporter, and Coats Bangladesh, a United Kingdom-based yarn and others raw materials supplier, the bank officials said.
“This derivative helps exporters and importers hedge their foreign exchange (FX) exposures sometimes more effectively than an FX Forward (FWD), which is an existing product in the market", Head of Global Markets of HSBC Bangladesh, Tarique I Khan, told BBN in the capital, Dhaka.
HSBC earlier launched some non-BDT Collar Options in EUR/USD, but since EUR/USD is widely traded globally, this USD/BDT transaction is a landmark deal, the bank officials said, adding that it reflects HSBC's emerging market led focus and strength.
“"If U.S. dollar or BDT moves beyond a certain adverse rate, customer is hedged at that rate and can exercise his right. Again, if the rate moves in favor of underlying foreign exchange exposure, customer can only benefit up to a certain level", Mr. Khan explained.
In order to reduce the Option premium to zero, the benefit of a favourable move is reduced, he further clarified.
This new product will benefit Bangladeshi customers to have a wider choice of hedging their foreign exchange risk exposures and it is likely to create a positive impression among potential foreign investors to the country, they added.
BBN/SS/SI/AD-10December09-11:40 am (BST)