If you do business outside the eurozone, chances are you will receive and/or make payments in a currency other than the euro. Because international currency markets are constantly moving, you face currency risks: your foreign currency may become less valuable compared to the euro. There are several ways to manage and hedge these risks. One of them is through foreign exchange transactions.
"}},{"componentType":"accordion","accordionList":[{"title":"Foreign exchange transactions: how do they work?","richBody":{"value":"A foreign exchange transaction is an agreement between 2 parties to exchange an agreed amount of one currency for an agreed amount of another currency. The exchange rate determines the ratio. For example: an exchange rate of EUR/USD 1.4000 means that one euro is worth 1.4000 US dollars. Exchange rates fluctuate and can vary at any given moment.
There are different types of foreign exchange transactions. The most common is a spot transaction. With a spot transaction, you exchange 2 currencies at the current exchange rate. As an ING business customer, you can carry out spot transactions yourself using Currency exchange in My ING business.
"},"textLinks":[{"url":"/en/business/payments/international-payments/currency-exchange","text":"More about Currency exchange"}]}]},{"componentType":"promotionalBanner","icon":{"transformBaseUrl":"https://assets.ing.com/transform/d27618f8-536e-4772-b86f-5119edab45ae/Circle-Coins-5","type":"image","width":64,"original":"https://assets.ing.com/m/7e4f399ea022700/original/Circle-Coins-5.svg","extension":"svg"},"body":"New: Currency Exchange. Quickly exchange currencies yourself at competitive rates whenever you need to or when the exchange rate is favourable and hedge your risks.","date":{},"textLink":{"url":"/en/business/payments/international-payments/currency-exchange","text":"To Currency exchange"}},{"componentType":"sectionTitle","title":"How does Currency risk management work?"},{"componentType":"paragraph","richBody":{"value":"Imagine your business imports goods from China. You pay for these goods in US dollars and sell them here in euros. If the risk on the US dollar is not hedged and the dollar increases in value between the time of purchase and payment, the cost in euros becomes higher. This could result in a lower gross profit margin.
There are several ways to manage and reduce such currency risks. As mentioned, you can use a foreign exchange transaction, but ING can offer you even more solutions. Our certified treasury specialists at the Financial Markets Desk have extensive expertise and closely monitor international financial markets in Europe, Asia, North America and South America. They will gladly help you identify risks by informing you about products and strategies to manage them. From the alternatives discussed, you can then make a well-informed decision.
"}},{"componentType":"paragraph","title":"How does this work?","richBody":{"value":"These are just a few examples of the solutions we can offer to help you manage currency risks. For more information and a personalised solution, please contact your relationship manager.
"}},{"componentType":"sectionTitle","title":"What are the costs of Currency risk management?"},{"componentType":"paragraph","richBody":{"value":"To manage currency risks, you need a Foreign currency account. The cost for this account is €6 per month.
If you want to carry out Currency risk management via ING’s Financial Markets Desk or through our online application ING Trade, the following conditions apply: