June 06, 2007 (LBO) – The Commercial Bank of Ceylon says it is broadened the availability of forex hedging products, allowing even individuals to use them in addition to large corporates and small and medium businesses. These products will also help customers to diversify their cash investment portfolios, Commercial Bank’s Head of Global Treasury, Dula Weeratunga said.
“Using the products, Commercial Bank will guarantee its customers that their capital will not be eroded by market fluctuations, unless the customer wants to factor in some market risk in trying to earn a higher return,” Weeratunga said.
A foreign exchange option is targeted at importers, exporters, foreign currency account holders, customers who travel frequently, students and others who wish to hedge their foreign exchange risk.
The bank is offering a ‘dual currency deposit’ which involves placing a deposit in one currency with the possibility that the principal will be repaid by the bank in a second currency if the spot exchange rate between the currencies is above or below a certain rate at expiry.
“For taking this risk, the client will be paid a higher yield than that offered by traditional deposit products,” the bank said,