Opening up forex options

The State Bank of Vietnam will allow banks to offer forex options with the aim of meeting greater forex demands of businesses and allowing more services as per international practices.

Allowing forex options is expected to provide businesses with an additional form to cover forex risk hedging in addition to the current operation of futures contract, said Dao Xuan Tuan, deputy head of the Exchange Rate Policy of the Forex Management Department of the SBV.

Tuan pointed out that forex options differs from futures contracts as a buying business can cancel the forex purchase contract with a bank while futures contract does not allow this.

 

Category: Finance