FX Par Forward
A single exchange rate for multiple payments with different amounts and settlement dates.
A series of forwards with different settlement dates and varying amounts, all using a single exchange rate – FX Par Forward (PF).
o you regularly receive or make international payments on different dates? An FX Par Forward (PF) allows you to hedge multiple future currency transactions using a single exchange rate. In practice, a PF is a series of independent standard forward contracts that may differ in both amount and settlement date, while sharing the same exchange rate throughout. This rate is more favourable than the rates you would typically obtain by arranging each forward separately. As a result, your hedging structure becomes significantly simpler, more transparent, and easier to manage.
We’ll give you a call and recommend the most suitable hedging solution for your business, tailored to your cash flow and specific requirements, ensuring the strategy fully aligns with your needs.
You Have Multiple Payments. Why Hedge Each One Separately?
Many companies know they will be receiving or making international payments over the coming months, but each payment often has a different due date. Without currency hedging, every transaction may be executed at a different exchange rate. An FX Par Forward (PF) allows you to arrange a series of forward contracts with different settlement dates while benefiting from a single exchange rate across all transactions.
Comparison of Currency Hedging with an FX Par Forward (PF) and a Window Forward
| FX Par Forward (PF) | FX Par Forward with Window | |
|---|---|---|
| Hedging Arrangement Date | 1 July | 1 July |
| Total Hedged Amount and Exchange Rate | 100 000 EUR, 25,00 EURCZK | 100 000 EUR, 25,00 EURCZK |
| Multiple Forward Contracts with Different Settlement Dates | 10 Jul, 18 Oct, 2 Nov, 30 Nov | 10 Jul, 18 Oct, 2 Nov, 30 Nov, each with a settlement window |
| Key Benefit | More favourable exchange rate | Greater flexibility |
Typical Situations Where an FX Par Forward (PF) Makes Sense
You have regular currency conversions, make recurring loan repayments in a foreign currency, and can accurately forecast future currency transactions
Your invoices and payments are received or made on an ongoing basis, but you are able to determine the exact date of each currency conversion
You want to simplify administration by using the same exchange rate for multiple future payments
You need to protect both your profit margins and cash flow from adverse exchange rate movements
You are looking to secure a more favourable exchange rate across a series of future transactions
An FX Par Forward is particularly suitable when you can precisely schedule the settlement dates of individual forward contracts and want to secure the best possible single exchange rate for multiple future payments.
Citfin Tip: Hedging your exchange rate with a forward contract is not about generating additional profit. It is about locking in an exchange rate that allows you to secure the margin you originally calculated on your goods or services. Without a forward contract, you are simply waiting to see whether exchange rate movements will increase or erode your profitability. With hedging in place, you know the outcome in advance and can plan with confidence.
How an FX Par Forward (PF) Works in Practice:
| FX Par Forward (PF) Arrangement Date | 2 January | |
| Single Hedged Exchange Rate | 25,00 EURCZK | |
| PF Settlement 1 | 22 500 EUR | 31 March |
| PF Settlement 2 | 23 425 EUR | 14 April |
| PF Settlement 3 | 11 826 EUR | 1 May |
| PF Settlement 4 | 10 000 EUR | 28 July |
| PF Settlement 5 | 17 896 EUR | 8 September |
| PF Settlement 6 | 14 353 EUR | 22 November |
1) Purchasing Requirements – Your company knows it will need to purchase euros regularly throughout the year to settle supplier invoices of varying amounts. Because you are seeking the most favourable exchange rate, can accurately define each settlement date, and prefer using a single exchange rate for greater clarity and easier planning, an FX Par Forward (PF) is an ideal solution.
2) Arrangement – Together with Citfin, you arrange an FX Par Forward (PF), allowing you to lock in a single exchange rate in advance for multiple future currency transactions of different amounts. From that moment on, you know exactly the rate at which you will purchase euros, regardless of how the market develops in the meantime.
3) Settlement – Each forward contract is settled on its pre-agreed maturity date, completely independently of the other forwards within the FX Par Forward (PF) structure. The settlement of one transaction has no impact on the remaining contracts, allowing each payment to be executed according to its specific amount and schedule while retaining the benefit of the shared exchange rate.
4) Rescheduling – If your payment dates change and one of the forward contracts needs to be settled earlier or later than originally agreed, an FX Swap can be used to adjust the settlement date. This allows you to maintain your hedging strategy while accommodating changes in your payment schedule.
An FX Par Forward (PF) is an ideal solution for companies that can accurately forecast and schedule their future settlements, prefer the simplicity and transparency of a single exchange rate across multiple transactions, and want to secure a more favourable rate than would typically be available with a window forward structure.
Benefits of an FX Par Forward (PF) for Exporters and Importers
Multiple hedges, multiple transactions, different maturities – all secured with a single exchange rate
By committing to precise settlement dates, you can obtain the most favourable exchange rate available
Has your settlement date changed? An FX Swap provides a straightforward solution
Accurate cash flow planning while protecting both margins and profitability
Exchange rate volatility is no longer a concern for your business
You know today exactly the rate at which you will exchange currencies in the future
New to Currency Hedging? Here’s What You Need to Know
Arranging currency hedging is simpler than many businesses expect. Companies often assume that hedging foreign exchange risk involves a complex process, extensive administration, or sophisticated financial products. In reality, the goal is exactly the opposite — to provide greater certainty, stability, and control over future international payments.
A Framework Agreement is required before entering into forward contracts or other hedging transactions. Citfin will guide you through the entire process and help ensure everything is set up correctly.
LEI Code. European regulations require companies to hold a Legal Entity Identifier (LEI) in order to arrange currency hedging transactions. If your company does not yet have an LEI code, Citfin can assist you with obtaining one.
A Dedicated Dealer Who Understands Your Business. Your dedicated dealer will work with you on the practical aspects of managing currency risk, including market developments, hedge utilisation, settlement scheduling, potential rescheduling through FX Swaps, and the overall hedging strategy. The relationship goes far beyond executing individual transactions — it is about the ongoing management of your company’s foreign exchange exposure.
Every Business Requires a Different Solution. An FX Par Forward (PF) may not always be the most suitable solution for your needs. Perhaps a different hedging instrument, an FX Option, or a tailored option strategy would be more appropriate. Every company operates differently. Some businesses require fixed settlement dates, while others prioritise maximum flexibility. Since 1996, Citfin has helped companies design hedging strategies that reflect their actual payment flows, cash-flow requirements, and business models. We are not simply a provider of hedging products — we are a long-term partner in managing currency risk.
Important Risk Information. The principal risks associated with currency hedging arise from future market developments and from the obligation to settle transactions on the agreed dates. Before entering into an FX Par Forward (PF), we will explain the product in detail, including how it works, its key features, and the risks involved, ensuring you can make an informed decision.
Not sure which type of forward contract is right for your business?
Leave us your contact details or speak directly with one of our specialists.
During a short consultation, we will assess whether a Standard FX Forward,
an Amortising FX Forward (AF), or another FX hedging solution is the most
suitable option for your business.
Tel.: +420 234 092 020
email: jiri.rys@citfin.cz
FAQ – Frequently Asked Questions
An FX Par Forward (PF) is a currency hedging solution that allows businesses to arrange a series of future forward contracts with different settlement dates while using a single exchange rate for all transactions. This provides greater certainty when planning future international payments and receipts.
A Standard Forward is used to hedge a single future currency transaction with one specific settlement date. An FX Par Forward (PF) enables you to hedge multiple future transactions with different settlement dates, while all transactions benefit from the same agreed exchange rate.
An FX Par Forward (PF) is primarily used by exporters and importers who expect multiple foreign currency payments or receipts over several months and want the certainty of a single exchange rate across all planned transactions.
The key advantage is the ability to hedge multiple future currency transactions using one exchange rate. This gives businesses better visibility of future costs and revenues, simplifies cash-flow planning, and protects against adverse currency movements.
The most commonly hedged currencies are EUR, USD, GBP, PLN, and HUF. Depending on your company’s requirements and the availability of the relevant currency pair, an FX Par Forward can also be arranged for other currencies.
Yes. Currency hedging is not only for large corporations. An FX Par Forward (PF) can be an effective solution for small and medium-sized enterprises that regularly trade internationally and want to reduce or eliminate foreign exchange risk.
The answer depends primarily on the structure of your international payments and receipts. If you expect multiple future transactions in a foreign currency and would benefit from using a single exchange rate across different settlement dates, an FX Par Forward (PF) may be an appropriate solution. A currency hedging specialist can assess your company’s specific requirements and recommend the most suitable approach.
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