First local currency 'Range Forward Contract' inked

Express (July 11, 2011)


BRAC Bank has introduced country's first local currency 'Range Forward Contract' to safeguard fluctuation risk of US dollar/Bangladeshi Taka for corporate houses engaged in international trade.

BRAC Bank Limited and Marico Bangladesh Limited have signed the "Range Forward Contract" recently through which Marico Bangladesh Limited will be able to cover of foreign exchange fluctuation risk with a price band.

Syed Mahbubur Rahman, Managing Director & CEO of BRAC Bank Limited and Rohit Jaiswal, Managing Director of Marico Bangladesh Limited, signed the contract on behalf of their companies recently in the city.

Mr. Mohammed Rahmat Pasha, Head of Treasury & Financial Institutions of BRAC Bank Limited, and Mr. Iqbal Chowdhury, Head - Corporate Affairs & Investor Relations and Company Secretary of Marico Bangladesh Limited, and senior officials were present.

This kind of deal would help the importing clients from adverse fluctuation of the foreign exchange market. Large corporate houses will now have a fresh option to cover their position through a cost effective new product. With this BRAC Bank has covered a new area of the foreign exchange derivatives previously absent in the market.

Managing Director & CEO of BRAC Bank Limited Mr. Syed Mahbubur Rahman said "We felt the urge to introduce new hedging products tailored for our customers according to their need. This innovative foreign exchange product will help the corporate houses to hedge their currency risk and save them from foreign currency fluctuation risk."

Head of Treasury & Financial Institutions of BRAC Bank Mr. Rahmat Pasha said "This will be a milestone product for the market through which corporate houses will be saved in the rainy days, when the currency market moves wildly."

The deal also demonstrates active support of Bangladesh Bank and the commitment of BRAC Bank, in developing foreign exchange derivative market. The range forward is a fresh derivative which helps corporate houses to save their money through staying in a price band. With development of financial market, the need for hedging price risk is growing for corporate houses. At present the corporate houses are having many scopes to hedge their risk through different derivative instrument as the market is developing with active guidance of Bangladesh Bank.