Spot transactions are simple contracts to buy or sell currency at spot exchange rates for spot delivery normally within 2 working days.
No documentation
Clients can cover exchange for receipts and payments of foreign currency.
Hedge against the currency fluctuations.
Rates are freely available from all HNB branches.
Forward transactions are simple contracts to buy or sell currency at Forward exchange rates for a forward value date normally more than 2 working days extending up to 12 months.
Commercial contracts involving goods and services.
Prearranged credit limits with the bank.
This is the exchange of one currency for another with pre-agreed dates by both parties. The initial principal amount is exchanged with the agreement to re-exchange at maturity. Both initial exchange and re-exchange rates are agreed by both parties at the beginning of the SWAP.
Less documentation.
Hedge against both interest and exchange risks.
Export Bills Discounting
Trade bills could be cashed before the due date. The Bank will purchase the bill and pay cash to the drawer equal to the face value less interest or discount at an agreed rate for the number of days.
Requirements
L/C bills need to comply with all terms and conditions set by the bank or with prearranged credit limits.
Benefits
Improve cash flow
Hedge against interest and exchange risk
Treasury Bills are short term debt instruments issued by the Central Bank of Sri Lanka on behalf of the Sri Lanka Government with fixed interest rates and maturity periods of 3, 6 and 12 months and are issued at a discount. Auctions are held on weekly basis. Denominations are available in multiples of Rs.10,000/- and the CBSL may accept higher or lower amounts than the offered amount at the auction, depending on market conditions.
Treasury Bonds are long term debt instruments issued by the Central Bank of Sri Lanka on behalf of the Sri Lanka Government with fixed interest rates and maturity periods from 2 to 30 years. Interest payments (coupon payments with fixed interest rates) are made every six months and the face value is repaid on the maturity date. Denominations are available in multiples of Rs.10,000/- and the CBSL may accept higher or lower amounts than the offered amount at the auction, depending on the market conditions.
