Master the art of setting and applying an FX budget rate.

A comprehensive guide for treasury, finance and risk managers to successfully apply a budget rate and factors to consider

Hedge

Hedging Policies

Ebury

Unlock global growth

A comprehensive guide for treasury, finance and risk managers to successfully apply a budget rate and factors to consider

Content

More about this guide

In the global currency landscape, where many factors are constantly changing and presenting unprecedented challenges, this begs the question: How do we set a robust FX strategy? This ebook goes beyond setting an FX strategy — we have a detailed guide to explain that. In fact, here we take one step back to answer the most fundamental and integral step in designing your FX strategy: how to set a budget rate. A well-defined budget rate is the cornerstone of a successful currency risk management strategy. In this guide, we’ll decode the role of a budget rate, its importance, how to set it and what to consider before applying it.

Key takeaways

What is a budget rate — and why does it matter?

Common methodologies for calculating a budget rate

Why a one-size-fits-all approach falls short

Key questions to ask before setting your rate

Six steps to apply a budget rate in your FX policy

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Frequently asked questions

How can I apply?

The best way to get started is to get in touch with one of our relationship managers and discuss your business needs.

How is Ebury different from my bank?

Traditional banks often bundle FX rates into a hidden spread and limit currency accounts to major currencies. Ebury offers transparent, no-hidden-fee pricing, 140+ currencies from one account, and a 99.9% payment success rate across 160+ countries.

How do I repay Ebury?

You can repay us within 150 days, along with interest accrued on the line, in your local currency at a rate pre-decided and mentioned in your terms and conditions.

How does the Ebury Forward Contract work?

A forward contract locks in today's exchange rate for a payment or receipt in the future. It turns an unknown future cost into a known, fixed cost.

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Example: You'll pay $100,000 to a US supplier in three months. With a forward, you fix the rate today at £1 = $1.35, so in three months, that $100,000 will cost you exactly £74,074, no matter what the market does in between.

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With Ebury, you can choose from a wide range of product suites*, including fixed forwards, window forwards, and dynamic forwards, so you can select the product that best fits your cash flows. You can also book non-deliverable forwards for emerging market currencies that can't be physically delivered.

How do I open an account with Ebury?

To open an account, you’ll need to provide the required documentation (e.g., entity structure details, KYC/AML information) and complete our client onboarding process. Our experienced team will guide you through every step for a quick and seamless setup.

How can I achieve my goals with hedging policies?

At Ebury, we may combine different hedging programs to help you manage your exposure. For example, our experts may combine layered and rolling hedging programs. This enables you to maintain a set hedging percentage while meeting your goals.

*Note: Hedging products availability may vary depending on your jurisdiction. Please get in touch with our team to learn about the products applicable to your country.

The information provided herein is general in nature and should not be construed as financial or investment advice. The information provided here is not legally binding. The information, data or views expressed here are for the exclusive use of the recipient and are subject to changes without any notice. You may ask the support team or your dedicated relationship manager to provide additional information regarding Ebury products.

Ebury

Unlock global growth

Don’t leave your FX and budgeting strategy to chance

At Ebury, we will help you achieve your set budget rate with a systematic approach. With our bespoke approach, dedicated support and hedging expertise, we work with you to design a custom and cost-effective risk management solution and help you execute and monitor it at every stage.

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