Assume that you are a Canada based exporter and you have exported a shipment of yellow peas

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Assume that you are a Canada based exporter and you have exported a shipment of yellow peas to India on 25th November, 2022. Invoice value is US $500,000 and the exchange rate on 25th November, 2022 is 1 USD = INR. 81.72 and 1 USD = CAD 1.34. Payment terms are 90 days open account. CIBC Bank Downtown Toronto has offered 90 days forward rate of INR. 81.31 for 1 USD on a forward premium of CAD 2,750. If the spot rate turns out to be 81.09 on 23rd February 2023, is the exporter better off or worse off? Did the exporter made or lost money by entering into a forward exchange rate agreement

Posted Date: Jun 21, 2024 02:03 AM

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Assume that you are a Canada based exporter and you have exported a shipment of yellow peas

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