Treasury Services

Manage foreign exchange requirements according to your business and risk profiles with the round-the-clock services:

• Fast, efficient and competitive pricing for all spot and forward foreign exchange transactions for G7 and Asian currencies
• Competitive pricing to help you hedge your requirements against foreign exchange fluctuations
• Solutions with embedded derivatives to improve foreign exchange hedging rates
• Market and currency trend analysis

A foreign exchange spot transaction is an agreement between two parties to buy one currency against another currency at an agreed price for delivery in two business days.

Foreign Currency Options

Currency options give the holder the right but not the obligation to sell / buy a currency against another currency in the future at a predetermined FX rate (exercise price). Currency options enable you to take a view on currency movements while protecting your downside risk.

An investor may buy a currency call / put option to hedge against unfavourable movement in exchange rates while maintaining the ability to benefit from favourable exchange rate movement.

A buyer of a call option can lock in maximum buying price of a future foreign exchange rate. A buyer of a put option can lock in minimum selling price of a future foreign exchange rate.

If foreign exchange rates move against you, you may exercise the option at the predetermined exercise price. On the other hand, if foreign exchange rates move in your favour, you may just let the option expire and contract at prevailing market rates.

The following products will require FX facilities with OCBC and will be subject to OCBC’s Product Terms. Please contact your Relationship Manager for further information.

A purchase or sale of one currency against another for delivery of more than 2 business days after the original date of contract and also includes transactions of value the same day (value tod) or the next business day (value tom). The pricing of a forward contract are combinations of the spot price and swap points.

As a hedging tool against foreign exchange fluctuations, a FX forward works well for your expected foreign currency trade receipt or payment on a known date in the future. 

Similar to the fixed delivery forward FX, the option delivery forward FX works as a hedging tool where the delivery of contract can be any time between the dates of contract to maturity.

FX Option structures are combinations of foreign currency options designed to deliver certain payout structures upon maturity. Typically the strike rates offered would be better than the comparable forward rates; however the delivery may involve more uncertainty relative to forwards.

* Terms and Conditions apply. View the Terms and Conditions for Spot FX contract and Currency Option here.

To help you hedge interest rate exposures, we have a broad range of instruments ranging from vanilla interest rate swaps and cross currency swaps to other solutions including interest rate caps, floors, collars and swaptions.

We currently offer these products:

• Interest rate swap (IRS)

  An IRS is an agreement between two parties to exchange streams of cash flows over multiple specified interest periods, based on a notional principal amount.

  • In a firmer interest rate scenario, a borrower with floating rate borrowings can use IRS to swap them into fixed rate borrowings and vice versa to reduce cost or hedge against interest rate risk.
  • In a declining interest rate scenario, an investor may synthetically convert a floating rate asset into a fixed rate asset and vice versa to improve return or hedge against interest rate risk.
  • IRS can be used to better match interest payment dates for cash flow management purposes.

• Forward rate agreement (FRA)

  An FRA is an agreement between two counter-parties to exchange a fixed interest payment for a floating interest payment, based on a specific notional principal amount, for a single specific interest period starting sometime in the future.

  FRAs are useful interest rate hedging tools used to manage short-term assets and liabilities, which are exposed to short-term interest rate risk.

  • In a firmer interest rate scenario, a borrower with floating rate borrowings can use FRA to fix future borrowing rate to hedge against interest rate risk.
  • In a declining interest rate scenario, an investor with floating rate asset can use FRA to fix a future investment rate to hedge against reinvestment price risk.

Fixed income products are instruments with periodic payouts until maturity. These include:

• Government bonds
• Corporate bonds
• Preference shares / perpetual bonds
• Credit-linked notes which pay fixed or floating interest on a regular basis
• Cash-settled credit default swaps

To hedge the upside or downside of commodity prices, we offer cash-settled commodity trades to hedge your exposures. Our commodity product offerings include energy, base and precious metals, as well as soft commodities.

To increase the upside or hedge the downside risks of your equity portfolio, we offer either physical stock unit settlements or cash-settled solutions to help you manage your exposure in stocks or stock indices.

OCBC offers you money market instruments to conduct your business in a highly competitive banking environment.

• Repurchase agreements

  This is an agreement which the seller of securities undertakes to repurchase the securities from a buyer at an agreed price on a specified future date.

  OCBC Bank offers you both Islamic and conventional repos which accommodate your depositary requirements from periods of overnight and above.

• Negotiable instruments of deposits (NIDs)

  A depository product, negotiable instruments of deposits are certificates issued by the bank specifying that a certain amount has been deposited with the bank at a specified rate for a specific tenure. NIDs are negotiable and tradable in the secondary market with tenor up to 10 years.

• Banker’s acceptances (BAs) outright sale

  A Bankers Acceptance is a bill of exchange drawn on a bank with a specific maturity date to finance a customer for a trade transaction. Subsequently, BAs can function as an investment instrument for your surplus funds where the amount and tenure of investment is subject to the availability of BA papers.

Structured Investments

Structured investments allow you to earn potentially higher returns compared to fixed deposits.

The structured investments are typically linked to underlying financial instruments (e.g. foreign exchange, interest rates, commodity, equity or bond) and, depending on its performance, the principal investment can be returned to you in another asset class (e.g. equity).

With no upfront fees or annual management fees to worry about, this offers an attractive investment opportunity for customers with medium to high risk appetite looking for enhanced yield.

Dual Currency Investments

This structured investment is linked to a pre-agreed currency pair.

Depending on the currency movement, the principal and guaranteed enhanced yield can be returned in either the original investment currency or the alternate currency, at the pre-agreed strike price at maturity.

The latter occurs when the alternate currency weakens against the investment currency beyond the pre-agreed strike price.

We offer additional value-added treasury services. These include:

• Overnight order services to assist you in obtaining your targeted foreign exchange rates after GMT1000 (Malaysia time: 1800 hours).
• Treasury seminars to provide current insights on the international financial markets. Contact us at treasurycare@ocbc.com.my to register.

• Regular and timely cutting-edge analytical research and market updates are available to keep you informed of the economic and world events as well as foreign exchange and interest rate trends.

  View research articles

For the latest rates, see our rates page