NMB Bank records 1st hedging transaction in Nepal in partnership with TCX & MFX
NMB Bank Limited, one of Nepal's leading commercial banks, has completed the first-ever recorded hedging transaction for USD 8 million in collaboration with The Currency Exchange Fund (TCX) in Amsterdam and MFX Currency Risk Solutions in Washington.
KATHMANDU: In recent years, Nepal has emerged as a favoured destination for development finance institutions (DFIs). DFIs provide financial assistance to developing countries in order for them to achieve economic growth.
Nepal’s natural beauty, strategic location, and vast resources make it an appealing destination for such organizations.
Foreign aid plays a crucial role in Nepal’s economy and as a result, it is vital for Nepalese banks to safeguard foreign currencies against exchange rate fluctuations in the market.
NMB Bank Limited, one of Nepal’s leading commercial banks, has completed the first-ever recorded hedging transaction for USD 8 million in collaboration with The Currency Exchange Fund (TCX) in Amsterdam and MFX Currency Risk Solutions in Washington.
The non-deliverable cross-currency swap used for hedging was supplied by TCX, and the transaction was facilitated by MFX.
NMB Bank recognized TCX and MFX Solutions’ experience and professionalism in guaranteeing the transaction’s success.
This historic decision reflects the Bank’s commitment to implementing and prioritizing such financial mechanisms to protect the safety of foreign currencies.
This enables NMB Bank to better manage the risks associated with foreign exchange rate swings, which is especially critical when working with DFIs.
Hedging is a strategy for reducing the risks associated with foreign exchange rate swings. It is an efficient technique for businesses to protect themselves from losses caused by changes in the value of a foreign currency.
NMB Bank believes that this successful hedging transaction now opens the door to everyone in the country who wants to conduct financial transactions with greater security and certainty, making it easier for them to do business and achieve their goals in an unpredictable market.
NMB Bank has been named Bank of the Year Asia 2021 by ‘The Banker Magazine’ of The Financial Times in London.
The bank was also named Bank of the Year in 2017, 2018, 2020, and 2021.
NMB Bank now serves customers through 201 branches, 138 ATMs, and 12 extension counters.
