Bank of America began to allow companies to lock in foreign exchange (FX) rates for up to one year.
In the press release of the mentioned financial institution, published last Sunday, October 20, it was noted that the offer of guaranteed FX rates simplifies the management of currency risks associated with cross-border payment transactions and receipts. The lender also separately underlined that within the framework of this offering, the exposure to fluctuations in exchange rates is reduced and treasury management processes are simplified.
Bhupen Velani, head of transactional FX trading in global markets at Bank of America, said that when currency risks are managed appropriately and effectively, companies processing large volumes of cross-border payment transactions can benefit enormously. He also separately noted that as the business models of the financial institution’s clients developed, the mentioned volumes increased and so too did the appeal to lock in FX rates with longer tenors.
The bank’s press release underlined that the new offer is intended for a market where the volume and value of cross-border payment transactions continue to be on a growth trajectory. To a large extent, as noted by the financial institution, the corresponding dynamic is related to innovations in the technology sector and businesses in the areas of e-commerce, services, manufacturing, and gig industries.
The lender’s press release also noted that Bank of America’s guaranteed FX rates support more than 200 currency pairings across multiple tenors, with the one-year tenor available in 37 currency pairs. It was also underlined that clients of a financial institution can access guaranteed FX rates through its CashPro digital banking platform and via Swift.
Daniel Stanton, head of transactional FX in global payments solutions at Bank of America, said that for corporate treasurers, the volatility of FX markets exacerbates the problem of forecasting cash flows. It was also separately noted that securing guaranteed FX rates of longer tenors will help them improve forecasting, which will lead to better-informed decisions.
Chandana Thanthrige of Bank of America, during a conversation with media representatives this month, said that solving for cross-border payments is becoming a financial frontier that cannot be ignored as global markets open up. According to him, the volume of transactions in the cross-border payment space has increased over the past five years. Chandana Thanthrige also stated that guaranteed FX rates stand out in cross-border commerce, as in this case, customers are provided with real-time information about rates, which is a guarantee that they can manage FX exposures without engaging in more complex hedging strategies.
It is worth noting that currently, cross-border payments are what can be called the lifeblood of international business, but for financial teams, transactions of the appropriate category are often associated with risks and difficulties. New solutions gradually reduce the mentioned problems.
As we have reported earlier, Bank of America Adds Transaction Search Engine to CashPro Platform.
Serhii Mikhailov
Serhii’s track record of study and work spans six years at the Faculty of Philology and eight years in the media, during which he has developed a deep understanding of various aspects of the industry and honed his writing skills; his areas of expertise include fintech, payments, cryptocurrency, and financial services, and he is constantly keeping a close eye on the latest developments and innovations in these fields, as he believes that they will have a significant impact on the future direction of the economy as a whole.
