TFEX collaborate Krung Thai Bank to facilitate USD futures investors

Bangkok, October 17, 2013 – The Thailand Futures Exchange PCL (TFEX), under The Stock Exchange of Thailand group, joins hands with Krung Thai Bank pcl (KTB) on a new service for USD futures holders, especially importers and exporters, and small- and medium-sized enterprises (SMEs), enabling them to exchange US dollars at KTB  branches on the last trading day of the contract. 

TFEX Managing Director Kesara Manchusree said TFEX signed a memorandum of understanding with KTB today to initiate a new service for USD futures investors who need to manage the risk regarding to US dollar movement. With the service, investor will be able to fix the currency rate they want via trading USD futures and exchange US dollars at KTB branches when the contract matures. Thus, it will provide importers and exporters, and small- and medium-sized enterprises (SMEs) an alternative in managing currency risk efficiently with low costs.

“TFEX has gained support from KTB since currency futures was launched last year. The bank, as a USD futures market maker, not only provides liquidity on trading arena but also keeps the product price to reflect the currency trading in the interbank market. With this MOU, the cooperation between TFEX and KTB will strengthen the usage of USD futures for hedging currency risk because investors can exchange US dollar at the price they have set through TFEX.”

KTB First Senior Executive Vice President, Managing Director Financial Management Group, Kittiya Todhanakasem said that KTB is preparing to offer currency exchange services for TFEX USD futures holders who contact the bank when the contract matures. Initially, the service would be provided through 55 branches in Bangkok, its suburbs, and major cities in the provinces. Clients could get US dollars in form of banknote or remittance, or the funds could be deposited into their foreign deposit accounts (FCD) if the payment due date didn’t match the contract maturity date.    

“This new service will help entrepreneurs, especially SMEs, to manage their currency risk and consequently, boost up the company competitiveness. This is also alternative for them who may not have credit line with bank to back up FX forwards transactions. Accordingly, this service also underlines one of KTB’s missions, which is to help strengthen SMEs business,” Kittiya added.

USD futures is a contract to trade US dollars on a specified date at a price that is fixed on the transacted date. Each contract has a value of USD 1,000. USD futures have four maturities, which are the three nearest consecutive months, plus the last month of the next quarter. Thus, for this October, the contract months will be in October, November, December 2013, and March 2014. The maturity date will be one day before the last business day of the month. For the first 9 months of 2013, the total trading volume of USD futures was 210,306 contracts, or 1,145 contracts per day on average.

For more information on USD futures or KTB’s exchange rate service, please contact TFEX  broker members or S-E-T call center 0 2229 2222 or www.tfex.co.th