| Situation
A luxury car dealer imports high-end sports cars from Europe.
The company always plans ahead for new model launch dates and
needs to secure import orders well in advance. The company is
also occasionally invited to bid on pre-release models, providing
unique opportunities to be the first on the market with new products.
Due to the large costs associated with importing luxury cars,
purchasing foreign currency upon invoice can substantially impact
the luxury car dealer's bottom line if the market is not favorable.
The company needs to plan in advance for future purchases on launch
dates and have foreign currency available for unexpected bidding
opportunities. |
 |
Solution
Ruesch offers Forward Contracts that let clients lock in a rate
of exchange in advance for delivery of funds on a future date.
Once a rate is secured, the settlement currency equivalent is
fixed for the duration of the contract, thereby protecting profits
from erosion. Because rates can be locked in up to a year in advance,
companies can monitor the market for favorable rates and secure
funds for upcoming needs. Additionally, Ruesch's Foreign Currency
Holding Balances help clients maintain short-term reserves of
foreign funds from the disbursement of Forward Contracts, Standing
Orders, or Spot Transactions. |
|
Outcome
By securing Forward Contracts, the luxury car dealer had funds
available to use throughout the year. When contracts matured,
the currency could be applied to invoices or stored in its Foreign
Currency Holding Balances. With its foreign currency rates secured,
the company could concentrate on upcoming model launches and be
prepared for business opportunities that came their way. |
