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Forward Payments & Contracts
This risk can be managed by using a forward contract. ABC Ltd plans to import goods from the United States, with payment of 100,000 US Dollars to be made in 3 months time. If they were to put through a spot transaction at today's exchange rate of 0.6700* they would only have to pay AU$149,000. If the exchange rate falls 10% between today and when they convert their funds, to .6030 then they would have to pay AU$165,000. ABC Ltd decides they do not want to take this risk and decide they would prefer to 'lock in' a rate today that will be used for the transfer in 3 months. They do this by booking a forward contract with OzForex at 0.6700. This contract is binding on both parties. ABC Ltd must give OzForex a deposit of 5% to ensure the performance of the contract. Just before the 3 months passes, ABC Ltd remits the AUD$149,000 (less the 5% already paid) to OzForex and then OzForex pays the USD$100,000 to ABC Ltd's suppliers account in the United States. OzForex charges no fees and there are no hidden costs. Important noteOnce the forward contract is booked it is binding. This means that in the above example ABC Ltd could not benefit from any increase in the value of the Australian Dollar, if that occurred. It also means that if ABC Ltd was unable to complete the transaction by paying OzForex the expected Australian Dollars, the contract would be terminated and any loss that occurred would need to be paid to OzForex by ABC Ltd (normally out of the 5% deposit).To get started email us at dealers@ozforex.com.au detailing your circumstances and we will send you more information.
Please email info@ozforex.com.au for more details or fill in the form below. You will be emailed a PDF guide to transferring money with OzForex. To view the file you will need the free Adobe Reader software which can be downloaded by clicking on the icon below. 
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IMPORTANT: This information has been prepared for distribution over the internet
and without taking into account the investment objectives, financial situation and particular
needs of any particular person. OzForex Pty Ltd makes no recommendations as to the merits of
any financial product referred to in this website, emails or its related websites. Please read our
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