|By Business Wire||
|July 27, 2014 08:55 PM EDT||
A new deal, signed between AFEX, one of the world’s largest non-bank providers of global payment and risk management solutions, and Australia’s export credit agency, Efic, will offer Australia’s export businesses better protection against adverse currency movements.
Under the new partnership, Efic will guarantee foreign exchange facilities offered by AFEX to exporters, enabling the foreign exchange specialist to increase the trading limit for clients. With increased limits, those clients will be able to protect more of their export contracts and better secure profit margins.
A foreign exchange facility can help exporters protect themselves from exchange rate fluctuations by locking in exchange rates and allowing them to hedge their currency exposure.
“We’re delighted to have agreed to this partnership with Efic," said Richard Poulton, Asia Pacific General Manager, AFEX. "It’s a powerful endorsement of the quality of our offering and strong position in the market. Australia relies heavily upon its export markets and it’s vital that businesses targeting overseas sales are well protected against ongoing and inevitable currency volatility.”
Alex Fernandez, Efic’s Head of Alliance & Product, SME, said, “We’re excited to offer Australian exporters even more support and protection in their international activities through this new partnership with AFEX, a trusted player in the foreign exchange market.”
AFEX continues to grow rapidly in Australia, roughly doubling its client base to 8,000 businesses in the last two years alone. It opened the first of three offices in Sydney in 2005, with Perth and Melbourne following in 2009 and 2011 respectively. Recent currency volatility demonstrates the need for the sophisticated payment and tailored risk management expertise AFEX is renowned for.
Measuring the effect of AUD currency volatility
The AUD USD currency pair regularly has moved more than 15% from the high to low during the last twelve months, more than enough to wipe out profit margin for many export businesses should they not put in place a hedging strategy.
For example, an exporter who took an order for USD 100,000 at the beginning of the year when rates were around 0.89 but was only taking receipt of payment now would be over AUD 6,000 worse off due to exchange rate movements.
AFEX offers a range of solutions, such as locking in the exchange rate payable on future transactions, giving the business certainty as to its profits and the margins achieved.
Established in 1979, AFEX is a leading global payment and risk management solutions provider that specializes in cross-border transactions and provides market expertise and unrivalled customer service for businesses and private clients. With a client base of over 17,000 active commercial customers worldwide, AFEX prides itself on tailoring its payment and foreign exchange services to meet its clients’ needs. AFEX’s online payment platform - AFEXDirect provides clients with one consolidated overview of their currency exposure and makes it easy for companies to manage international invoices. AFEX maintains offices across the United States, Australia, Europe, Middle East and Asia.
To find out more, please visit www.afex.com.