Foreign Exchange Transactions_Agricultural Bank of China (2024)

Foreign exchange transactions include: spot and forward foreign exchange purchase and sale transactions; the spot and forward foreign exchange transaction; and the foreign exchange option transactions. More specifically, foreign exchange transactions include: the spot foreign exchange purchase and sale and foreign exchange transaction business for personal customers; the spot, forward and option-date forward foreign exchange transaction business for corporate customers; and the foreign currency option transaction.

Personal Customers:
1. "Wai Hui Bao" personal foreign exchange transaction
The "Wai Hui Bao" is a foreign exchange transaction service that ABC launched for personal customers. In this business, our customers may handle spot foreign exchange transactions between different currencies during the specific trading time of ABC's personal foreign exchange transaction system.
The "Wai Hui Bao" business of ABC provides 24-hour foreign exchange transaction services from 8:00 a.m. on Monday to 6:00 a.m. on Saturday every week. Ten currencies are accepted in this business including: US dollar, GB pound, Euro, Japanese Yen, Canadian dollar, Australian dollar, HK dollar, Swiss Frank and Swedish Krona. These currency quotations are made in synchronization with the international foreign exchange market. The customers may conduct spot transactions or various sorts of pending order transactions.
With usage of the "Wai Hui Bao" transaction, our customers may accomplish the following objectives:
Conversion between foreign currencies: to convert the foreign currency fund he/she holds into another foreign currency;
Income benefits from exchange differences: to operate based on changes of the daily exchange rate in the foreign exchange market and earn income from exchange differences.
Interest margin income: to convert funds from a foreign currency using a lower interest rate to another foreign currency with a higher interest rate and gain the difference in interest marginal income.
2.Personal foreign exchange purchase and sale:
The personal foreign exchange purchase service refers to the business where the customer converts their foreign currency fund to an RMB fund pursuant to the real-time quotation of the Bank towards the transaction date on the basis of meeting the regulations of the State Administration of Foreign Exchange. The personal foreign exchange sale business refers to the business where the customer converts their RMB fund into a sum of foreign currency fund based on the real-time quotation of ABC towards the transaction date on the premise of meeting the regulations of the State Administration of Foreign Exchange.

Institutional Customers:
1.Spot foreign exchange purchase and sale
The spot foreign exchange purchase and sale refers to the service of spot foreign exchange purchases and spot foreign exchange sales. The spot foreign exchange purchase refers to the business where the designated outlet buys foreign exchange from institutional customers based on the spot exchange rate in the foreign exchange purchase and sale market, and pays the equivalent amount in RMB. The spot foreign exchange sale refers to the business where the designated outlet sells foreign exchange to institutional customers based on the spot exchange rate in the foreign exchange purchase and sale market, and collects the equivalent amount in RMB.
It is applicable towards the domestic institutions and the other customers, and approved by the State Administration of Foreign Exchange.
2. Forward foreign exchange purchase and sale
The forward foreign exchange purchase and sale refers to the business where the customer signs a forward foreign exchange purchase and sale agreement with the Bank, specifying the foreign exchange currency, amount, terms and exchange rate of a future foreign exchange purchase/sale transaction. This is put in place in order to handle the foreign exchange purchase and sale business pursuant of the currency, amount and exchange rate specified in the agreement at the time provided in the agreement.
This product enables the customer to preserve the asset value and avoid exchange rate risks by locking up the future exchange rate at present (i.e. locking up the future cost or gains).
3. Option-date forward foreign exchange purchase and sale
The option-date forward foreign exchange purchase and sale refers to the business where the customer may deliver the foreign exchange purchase and sale transaction according to a given exchange rate on any working day during a future period of time. It is a forward foreign exchange purchase and sale business in which the customer may select the delivery date.
In the event of an uncertain date of delivery, this product enables the customer to enjoy a fixed exchange rate for his/her foreign exchange purchase and sale transaction during a certain period of time and thus, completely locks up the currency exchange rate risks. It is applicable for the customers who have the foreign exchange purchase and sale demand in the future but are not sure about the concrete delivery date.
4. Super-forward foreign exchange purchase and sale
The super-forward foreign exchange purchase and sale refers to the foreign exchange purchase and sale businesses with an value date of one year later. In other words, the customer appoints a delivery date that is one year later, and entrusts the bank to buy (or sell) RMB and sell (or buy) a certain foreign currency on the delivery date.
The customer entrusts the bank to convert funds between RMB and a foreign currency based on the exchange rate specified in the agreement on a certain delivery rate. It decides a fixed exchange rate for a future delivery on the transaction date, and thus, fully locks up the currency exchange risks.
It is applicable to the customers who need to purchase or sell foreign exchange on a certain date in the future.
5. Spot foreign exchange transaction
The spot foreign exchange transaction refers to the business where both trading parties handle a foreign exchange transaction based on the spot exchange rate of the foreign exchange market, and handles the delivery on the second working date after the transaction date (T+2). The customer may handle the transaction based on the spot exchange rate of the market or entrust a bank to send the pending order.
6. Forward foreign exchange transaction
The forward foreign exchange transaction refers to foreign exchange transactions where both trading parties conclude a transaction on a given future delivery date based on the exchange rate provided in the agreement. The customer may completely fix the exchange rate of a future delivery on the transaction date and thus, lock up the exchange risk. It is applicable to the customers who need to handle a foreign exchange transaction on a certain date of the future.
7. Option-date foreign exchange transaction
The option-date foreign exchange transaction enables the customer to deliver a foreign exchange transaction at a given exchange rate on any working day during a future period of time. It is a forward foreign exchange transaction in which the customer may select the delivery date.
In the event of an uncertain date of delivery, this product enables the customer to enjoy a fixed exchange rate during a future period of time on the transaction date and thus, completely locks up the exchange rate risks. It is applicable for the customers who have the foreign exchange transaction demand in the future but are not sure about the concrete delivery date.
8. Super-forward foreign exchange transaction
The super-forward foreign exchange transaction refers to the forward foreign exchange transactions with an value date of one year later. In other words, the customer appoints a certain delivery date that is one year later and entrusts the bank to buy a currency and sell another currency on that delivery date. In this transaction, the customer decides a fixed exchange rate for a future delivery transaction on the transaction date and thus, fully locks up the exchange rate risks. It is applicable to the customers who need to handle a foreign currency transaction on a certain date in the future.
9. Foreign exchange options transactions
The foreign exchange options transaction entitles the buyer to buy or sell a certain amount of foreign currency funds to the seller based on the agreed exchange rate during a certain period of time in the future, after he/she pays a certain sum of option fees. Meanwhile, the buyer in the agreement is also entitled not to execute the above-mentioned transaction agreement.
After the customer pays a certain sum of option fees, he/she gets the right to buy a certain amount of fund in a certain currency or sell another amount of fund in another currency to the bank based on an agreed exchange rate. The customer may also get the option fees income by selling his/her options agreement on the transaction date.