NMB Bank Limited records first hedging transaction in Nepal in partnership with TCX and MFX

Kathmandu, April 19. Nepal has become one of the preferred locations for development finance institutions (DFIs) in recent years. DFIs provide financial support to help developing countries achieve economic growth. Nepal’s natural beauty, strategic location, and abundant resources make it an attractive location for such institutions. Foreign aid plays a crucial role in Nepal’s economy and as a result, it is vital for Nepalese banks to safeguard foreign currencies against exchange rate fluctuations in the market.

NMB Bank Limited, one of the leading commercial banks in Nepal, has successfully conducted the first-ever recorded hedging transaction of USD 8 Million in partnership with The Currency Exchange Fund (TCX), Amsterdam and MFX Currency Risk Solutions, Washington.

The hedging instrument non-deliverable cross-currency swap used was sourced by TCX and the transaction was facilitated by MFX.NMB Bank acknowledged the expertise and professionalism of TCX and MFX Solutions in ensuring the success of the transaction. This landmark move demonstrates the Bank’s commitment to introducing and prioritizing such financial mechanism to ensure the safety of foreign currencies.

With this, NMB Bank is now better equipped to manage the risks associated with currency exchange rate fluctuations, which is particularly important when working with DFIs. Hedging is a technique used to minimize risks associated with currency exchange rate fluctuations. It is an effective way for businesses to protect themselves from losses that may occur when the value of a foreign currency changes.

NMB Bank believes this successful hedging transaction now opens door to everyone in the country who want to perform financial transactions with greater stability and certainty, making it easier for them to do business in a volatile market and achieve their goals.

‘The Banker Magazine’ of The Financial Times, London, has awarded NMB Bank with the prestigious Bank of the Year Asia 2021. The bank has also been awarded with Bank of the Year in 2017, 2018, 2020 & 2021. NMB Bank is currently providing its services through 201 branches, 138 ATMs and 12 extension counters.