Under foreign exchange operations are understood the following transactions:
- Acquisition of currency values or their legal alienation by a resident from a resident;
- Use of currency values and securities as means of payment;
- Acquisition of currency values or their legal alienation by a non-resident from a non-resident;
- Import into the customs territory of the country of currency values, currency and domestic securities;
- Currency transfers both to accounts within the country and abroad.
Foreign exchange operations are divided into two large categories: current and those associated with the movement of capital.
Current foreign exchange transactions include:
- Currency transfers to and from the country to pay bills for import or export of products without deferred payment. This also includes funds for settlements related to lending to import-export transactions for a period not exceeding 3 months;
- Financial loans for a period not exceeding six months;
- Transfers from / to the country of income on foreign currency deposits (interest, dividends, etc.) and any type of investment, as well as on operations with any type of foreign currency capital;
- Non-trade transfers, including pensions and social benefits
Currency operations related to the movement of capital:
- Direct investments (participation in the authorized capital to obtain management rights and part of dividends);
- Investments in the acquisition of securities;
- Financial loans for a period of more than 180 days;
- Transfers intended to pay for property in real estate;
- Receiving and providing a deferred payment on export-import operations for a period of more than 3 months;
- other operations not included in current ones.
Urgent foreign exchange transactions and their types are transactions that protect against currency risks. The main types of currency urgent operations are
forwards, futures, options, swaps, leeds and legends.
A forward is an over-the-counter foreign exchange transaction that is executed by a bank or commercial organization on the basis of an agreement and which provides for compensation for losses of both parties from changes in interest rates.
Futures is a currency contract, according to which a certain amount of currency is delivered at a rate determined in advance for a certain time.
Option - this type of currency transaction enables the purchase and sale of currency at a fixed price at a certain point in time.
Lead & Legs is the acceleration or deceleration of payments in foreign exchange trading to protect the transaction from risk.
SWAP is a bank transaction, which consists of 2 mutually offset transactions for the same amount that are concluded on one day, one of these transactions is urgent, and the second is for immediate delivery.
The main types of currency transactions are:
- Maintaining foreign currency accounts (opening, calculating interest on balances, overdrafts, providing extracts on foreign exchange transactions, providing an archive of accounts for a certain time period, performing operations with foreign currency accounts of clients, providing legal support for foreign exchange transactions, providing transactions with relevant documentation (This service is very popular with Clients who want to make currency transactions, but do not know all the legal subtleties and would like to protect their transaction from risk .;
- Non-trading operations related to customer service and not related to commercial transactions. The most popular of these operations is the issuance of bank cards, the purchase and sale of currency to the population through a network of exchange points, the accelerated processing of travel checks and travel documents in foreign currency for traveling abroad,
Foreign exchange operations are one of the most significant components of the bank’s income, and therefore each year the range of such services expands.