IFRS 9 drives appetite for long-dated hedges in Asia

New accounting standard helps manage mark-to-market volatility of long-term trades

long road - driving - Getty - web.jpg
The long haul: a key driver behind this trend is that the cost of hedging has dropped significantly

New accounting rules are driving the uptake of long-dated forex hedges among Asian corporates, as growing geopolitical concerns heighten currency volatility.

“We are seeing a lot of volatility in the currency markets at the moment, and so by changing the tenor of hedges we can save on the mark-to-market costs of hedging,” says a senior manager in the Asian treasury department of a larger corporate. “I run a very large book, close to US$2 billion, so the savings can be significant.”

Bankers say

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact [email protected] or view our subscription options here: http://subscriptions.risk.net/subscribe

You are currently unable to copy this content. Please contact [email protected] to find out more.

To continue reading...

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here: