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What is forward cover? | Ask An Expert | Bayzat SME Hub

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Feb 21

What is forward cover?

1 comment
Feb 24

When issuing an export invoice, you can ask your bank to lock in the current exchange rate for you. That way you won’t lose if the exchange rate moves against you while waiting for payment. Of-course you won’t win if it moves in your favour either.

 

There are other ways to hedge against currency risk, but this is the most common for small businesses that don’t do a lot of international trade.