Case Study

A simple strategy to manage an exotic demand

Client Profile

A small business importing garden furniture from Asia.

Scenario

The company imports high quality furniture from Asia, which is sold by the company exclusively at exhibitions and events.

The variable supply of wood and seasonal demand for furniture mean that projecting foreign exchange requirements is a challenge for this company. Purchasing garden furniture from Asia, the company requires a wide range of currencies with which to pay its suppliers, and was not always able to obtain the more exotic currencies from its bank. Fluctuations in exotic currencies also meant that the company was vulnerable to the variable cost of its imported products.

Solution

Moneycorp can offer the company the exotic currencies they require. Comprehensive market information provided by its personal dealer at Moneycorp helps the company to plan the best time to purchase its currencies. In addition, the company now uses forward contracts to offset some of the variances in garden furniture costs. As a result, it is able to plan its costs for the garden furniture and is no longer exposed to currency market fluctuations.

Benefit

The greatest benefit to the furniture manufacturer of using Moneycorp’s services is the range of currencies available, something that the company’s bank was not able to offer. This, coupled with detailed market information about specific currencies and the option of fixing forward contracts, has given the company an advantage when purchasing wood from Asia, and has allowed it to make accurate cost projections.

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