S. M.

Mahruf Billah

1) On 16th July, your export-customer requests you to book a forward contract for fixed delivery
2 months in respect of a 30 days bill for Australian Dollar 40,000. US dollars were quoted in
the interbank market as under:
Spot USD 1= 48.6850/7275
Spot/August 4000/4200
Spot/September 7500/7700
Spot/October 1.0500/1.0700
Spot/November 1.4000/1.4200
At Singapore market, Australian Dollars were quoted as follows:
Spot USD 1= AUD 1.9130/9140
One month 112/102
Two months 202/192
Three months 300/295
Four months 385/378
Transit period is 25 days. Exchange margin is 0.10%. Calculate the rate to be quoted to the
customer.
Solution:
Considering the forward period of 2 months, usance 30 days and transit period of 25 days, the
bill is expected to realize on 12 th November. US dollar is at premium against Bangladeshi Taka.
Therefore, the period will be rounded off to end October.
Dollar/Taka spot buying rate =TK 48.68500
Add: Premium for October +TK 1.05000
= TK 49.73500
Less: Exchange margin at 0.10% on TK 49.7350 - TK 0.04974
TK 49.68526
Against Australian dollar, the US dollar is at discount. Since the selling rate is being considered,
the forward margin will be taken for three months rounding off the forward period of 2 months,
usance 30 days and transit period 25 days to the lower month.
US dollar/Australian dollar spot selling rate AUD 1.9140
Less: Discount for 3 months -AUD 0.0295
AUD 1.8845
Forward buying rate for Australian dollar (48.68526/1.8845) = TK 26.3652
Rounded off, the rate quoted would be TK 26.3650
 S. M. Mahruf Billah

2) Your importer-customer has requested you to book a forward exchange contract for Swedish
Kronor 35,000 for fixed delivery 6 th month. Assuming Swedish Kroners are quoted in Singapore
foreign exchange market against US dollars as under:
Spot USD 1= SEK 6.0700/0750
3 months forward 950/1050
6 months forward 2300/2500
And the US dollars are quoted in the local interbank exchange market as under:
Spot-USD 1= TK 48.7000/8500
3 months forward 1.8000/1.6000
6 months forward 3.7000/3.5000
What rate will you quote to your customer bearing in mind that your exchange margin is
0.15% for TT selling and 0.2% for bills selling?
Solution:
Dollar/Taka spot selling rate TK 48.8500
Less: Discount for 6 months -TK 3.5000
TK 45.3500
Add: Exchange margin at 0.15% for TT selling on TK 45.3500 TK 0.0680
TK 45.4180
Add: Exchange margin 1t 0.20% for bill selling on TK 45.4180 + 0.0908
TK 45.5088

Dollar/Kroner spot buying rate SEK 6.0700

Add: Premium for six months + SEK 0.2300
SEK 6.3000

Forward bills selling rate for Kroner (45.5008/6.3000) TK 7.2236

Rounded off the rate quoted is TK 7.2225 per Kroner

 S. M. Mahruf Billah

3) Your export-customer requests you on 4th April to book a forward contract of CAD 85,000 for
delivery customer’s option June. Assuming you cover your purchase of Canadian dollars in
Singapore market and the USD-CAD are quoted as under:
Spot USD 1= CAD 1.5625/5635
1 month 30/25
2 months 60/55
3 months 80/75
And the Taka-US dollar is quoted in the interbank market as under:
Spot USD 1 = TK 49.4875/4975
Spot/May 1100/1200
Spot/June 2200/2300
Spot/July 3300/3400
What rate will you quote to your customer bearing in mind that an exchange margin of 0.10%
has to be loaded in the exchange rate? What will be the taka amount payable to the
customer?
Solution:
US dollar is at premium against Taka. So earliest delivery will be taken (1 st June) and the
customer will be quoted on the basis of Spot/May buying rate for dollar in the interbank market.

US dollar/Taka spot buying rate =TK 49.4875

Add: Premium for May + TK 0.1100
= TK 49.5975
Less: Exchange margin at 0.10% on TK 49.5975 -TK 0.0496
Forward buying rate for US dollar = TK 49.5479
US dollar is at discount against Canadian dollar. Since selling rate is reckoned earliest delivery
date will be considered, which is 1st June and falls between first and Second month. Rounding off
to the earlier month, the customer rate will be based on one month US dollar/Canadian dollar
rate is Singapore market.
US dollar/Canadian dollar spot selling rate CAD 1.5635
Less: Discount for one month - CAD 0.0025
CAD 1.5610
Forward buying rate for Canadian dollar (49.5479/1.5610) = TK 31.7411

Rounded off, the rate quoted is TK 31.7400 per Canadian dollar. Taka amount payable to the
customer for CAD 85,000 is TK 26,97,900.
 S. M. Mahruf Billah

4) Your customer requests on 8th May to book a forward contract to cover an export bill for
Singapore Dollars 100,000 drawn on Singapore and payable 30 days after sight with option to
him over the month of July. The following rates prevail in the interbank market for US dollars:
Spot USD 1= TK 49.4875/4925
Spot/May 1600/1700
June 3100/3200
July 4600/4700
August 6100/6200
September 7600/7700
October 9100/9200
At Singapore market, Singapore Dollar is quoted at:
Spot USD 1= SGD 1.4004/4078
1 month forward 70/75
2 months forward 110/115
3 months forward 150/155
4 months forward 190/195
5 months forward 230/235
6 months forward 270/275
Transit period is 25 days. Exchange margin required is 0.10%.
What rate will you quote to your customer?
Solution:
US dollar is at premium against Taka. Earliest delivery under the forward contract is on 1 st July.
Usance period of 30 days and transit period of 25 days, add up to 55 days making 25 th August
the due date of the bill. This will be rounded off to the lower month and the exchange rate to
the customer will be based on Spot/July rate for US dollar in the interbank market.
US Dollar/Taka spot buying rate = TK 49.4875
Add: Premium for July + TK 0.4600
= TK 49.9475
Less: Exchange margin at 0.10% on TK 49.9475 - TK 0.0499
Forward buying rate for US dollar = TK 49.8976
US dollar is at premium against Singapore dollar. Since selling rate is to be considered, taking
latest delivery of 31st July, the bill is expected to realize on 20 th September, which falls in the fifth
month from 5th May. The forward rate to the customer will be calculated based on 5 months
forward US dollar/Singapore dollar rate.
US dollar/Singapore dollar spot selling rate =SGD 1.4078
Add: Premium for 5 months + SGD 0.0235
= SGD 1.4313
Forward buying rate for Singapore Dollar (49.8976/1.4313) = TK 34.8617
The rate quoted to the customer is TK 34.8625 per Singapore dollar.