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Dec 01, 2011 at 02:43 AM

Limits for Foreign Exchange

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Hi,

Does the limit check works for foreign exchange SPOT transactions? Logically, I think it will not, as the settlement for spot is carried out immediately. I've assigned risk category "settlement risk" for my determination procedure and It was mentioned when I did the F1 for Risk Category that settlement risk arises in the case of transactions involving capital swaps, for example, forward exchange transactiosn, forward security transactions and swaps. It rerefs to the danger that the business partner will not fulfill the obligations specified in the contract when the swap is carried out.

Thanks,

Chaikaru