Definition
The use of financial instruments such as forward exchange contracts, currency options or swaps to reduce exposure to adverse exchange-rate movements. Importers and exporters hedge to protect margins against rand volatility between the time a price is agreed and the time payment is made. Hedging instruments in South Africa are offered by authorised dealer banks under South African Reserve Bank oversight.
Frequently asked questions
What is Forex Hedging?
The use of financial instruments such as forward exchange contracts, currency options or swaps to reduce exposure to adverse exchange-rate movements. Importers and exporters hedge to protect margins against rand volatility between the time a price is agreed and the time payment is made. Hedging instruments in South Africa are offered by authorised dealer banks under South African Reserve Bank oversight.
Which glossary terms are related to Forex Hedging?
Forex Hedging is a procurement term in the South African import/export industry. Related terms in the same area include Advance Payment, Bank Guarantee, CSD (Central Supplier Database), Designated Sectors, Documentary Collection — each has its own plain-English definition in the TradeCaravan glossary.