FX Par Window Forward
A single exchange rate for multiple payments, combined with the flexibility to settle the hedge within a defined time window.
A series of forward contracts with different settlement dates, varying amounts, and settlement windows of different lengths, all using a single exchange rate – FX Par Window Forward (PFW).
Do you make regular international payments or collections but do not know the exact settlement dates in advance? FX Par Window Forward (PFW) allows you to secure a single exchange rate for multiple future transactions while retaining the flexibility to draw down individual forwards within a pre-agreed time window. It combines the benefits of an FX Par Forward and a Window Forward in a single solution.
We’ll call you to discuss your requirements and recommend the most suitable hedging solution for your business. Based on your cash flow profile, we will tailor the structure to ensure it aligns with your specific needs and objectives.
What is FX Par Window Forward (PFW)?
FX Par Window Forward (PFW) consists of a series of forward contracts on the same currency pair, all executed at a single agreed exchange rate. Each individual forward can have its own settlement date, transaction amount and settlement window during which the contract may be drawn down at the hedged rate. The key feature that links all transactions is the common exchange rate, while all other parameters can be tailored to specific payment requirements.
This structure provides businesses with certainty over future exchange rates while offering greater flexibility in payment planning. By combining multiple transactions under one rate, companies can simplify their hedging strategy without sacrificing operational flexibility.
Unlike a standard forward contract, there is no need to know the exact date of a future payment or collection. It is sufficient to have an approximate timeframe during which the payment or receipt is expected to occur, allowing the hedge to be utilised within the agreed settlement window.
Comparing FX Hedging with FX Par Forward and FX Par Window Forward (PFW)
| FX Par Forward | FX Par Window Forward (PFW) | |
|---|---|---|
| Hedge execution date | 1 July | 1 July |
| Total hedged amount and exchange rate | EUR 100,000 at 25.00 EUR/CZK | EUR 100,000 at 25.00 EUR/CZK |
| Multiple forwards with different settlement dates | 7 Oct, 18 Oct, 2 Nov, 30 Nov | 7 Oct, 18 Oct, 2 Nov, 30 Nov, each with its own settlement window |
| Key benefit | More favourable exchange rate | Greater flexibility |
Typical Situations Where FX Par Window Forward (PFW) Makes Sense
You have multiple foreign currency payments or collections throughout the year and would benefit from using a single exchange rate for greater transparency and easier budgeting
The settlement dates of your invoices are often difficult to predict, making it challenging to match hedging contracts to exact payment dates
You want to apply the same exchange rate to multiple future transactions, simplifying financial planning and reporting
You need to protect both your profit margins and cash flow from adverse currency movements
You require greater flexibility when settling multiple future FX transactions, without sacrificing exchange rate certainty
A typical use case includes exporters expecting multiple foreign currency receipts at different times throughout the year, as well as importers planning a series of future payments to overseas suppliers.
One of the key advantages of hedging with Citfin is that forward contracts are easily accessible to small and medium-sized businesses. For many SMEs, exchange rate certainty can play a crucial role in protecting margins and planning cash flow. FX Par Window Forward (PFW) can be arranged from as little as EUR 10,000 or the equivalent amount in another currency.
How FX Par Window Forward (PFW) Works in Practice
| PWF Transaction | Amount | Settlement Window | Settlement Date |
|---|---|---|---|
| PWF 1 | EUR 22,500 | 5 days | 31 March |
| PWF 2 | EUR 23,425 | 52 days | 14 April |
| PWF 3 | EUR 11,826 | 48 days | 1 May |
| PWF 4 | EUR 10,000 | 26 days | 28 July |
| PWF 5 | EUR 17,896 | 17 days | 8 September |
| PWF 6 | EUR 14,353 | 33 days | 22 November |
1) Expected Transactions – Your company knows it will need to purchase euros regularly throughout the year to pay supplier invoices of varying amounts. Since it is difficult to predict the exact settlement dates in advance, but you prefer using a single exchange rate for greater transparency and easier budgeting, you decide to arrange an FX Par Window Forward (PFW).
2) Hedge Execution – Together with Citfin, you enter into an FX Par Window Forward (PFW) that locks in a single exchange rate for multiple future currency transactions with different amounts, maturities and settlement windows. From that moment on, you know exactly at what rate your euros will be exchanged, regardless of future market movements.
3) Settlement – Within each agreed settlement window, you can contact your dealer at any time and draw down the relevant forward at the hedged exchange rate. The settlement of one forward has no impact on the remaining forwards included in the PFW structure.
4) Adjustment – If payment schedules change and one of the forwards needs to be settled earlier or later than originally planned, an FX Swap can be used to adjust the settlement date while maintaining the effectiveness of your hedging strategy.
FX Par Window Forward (PFW) is an ideal solution for businesses seeking a more favourable exchange rate while maintaining flexibility over settlement timing.
Benefits of FX Par Window Forward (PFW) for Exporters and Importers
Multiple hedges, different maturities, varying settlement windows – all under a single exchange rate
Greater flexibility when drawing down individual forwards
Need to change a settlement date? An FX Swap provides a simple solution
More accurate cash flow planning and protection of margins and profitability
Exchange rate volatility no longer poses a risk to your business
Know today the rate at which you will exchange currencies in the future
New to FX Hedging? Here’s What You Need to Know
Arranging FX hedging is often much simpler than businesses expect. Many companies assume that hedging involves complex financial products, extensive paperwork or a complicated approval process. In reality, the goal is exactly the opposite — to provide greater certainty, stability and control over future foreign currency payments and receipts.
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 entering into FX hedging transactions to hold a Legal Entity Identifier (LEI). If your company does not yet have one, Citfin can assist you with the application process.
Dedicated Dealer Support. Your dedicated dealer will work with you on the practical aspects of managing currency risk, including market developments, hedge utilisation, settlement adjustments and the overall structure of your hedging strategy. The relationship extends beyond individual transactions and focuses on the long-term management of your company’s FX exposure.
Every Business Is Different. No two businesses have the same requirements. If FX Par Window Forward (PFW) is not the most suitable solution, Citfin can help you explore alternative hedging products, including FX Spot Market Forward (SMF), Average Market Forward (AMF), FX Par Forward (PF), FX Options or more advanced option strategies.
Some companies require precise settlement dates, while others prioritise maximum flexibility. Since 1996, Citfin has helped businesses design hedging strategies tailored to their actual payment flows, cash flow requirements and business models.
Important Risk Information. FX hedging involves risks arising primarily from future market developments and the contractual obligation to settle transactions according to agreed terms. Before entering into an FX Par Window Forward (PFW), Citfin will explain how the product works, its key features and the potential risks involved, enabling you to 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
What is FX Par Window Forward (PFW)?
FX Par Window Forward (PFW) combines the features of an FX Par Forward and a Window Forward. It allows businesses to secure a single exchange rate for multiple future payments or collections while providing the flexibility to settle individual transactions within pre-agreed time windows.
It is an ideal solution for exporters and importers who expect multiple foreign currency payments or receipts at different times and do not know the exact settlement dates in advance. The product helps manage currency risk without requiring precise day-by-day settlement planning.
An FX Par Forward applies one exchange rate to multiple future transactions with fixed settlement dates. FX Par Window Forward (PFW) adds flexibility by allowing each individual transaction to be settled within a predefined time window, giving businesses greater control over settlement timing.
No. FX Par Window Forward (PFW) is specifically designed for situations where the exact settlement date is unknown. It is sufficient to estimate the period during which the payment or collection is expected to occur and define an appropriate settlement window for each transaction.
The exchange rate is agreed when the hedge is arranged. This gives your business certainty over future exchange rates regardless of how EUR/CZK, USD/CZK or any other currency pair moves in the weeks or months ahead.
If the settlement date changes, the situation can typically be managed through an FX Swap. This allows the settlement date to be moved forward or postponed to match your actual payment requirements. This flexibility is one of the key advantages of FX Par Window Forward (PFW).
A standard forward is most suitable when the exact date of a future payment is known. FX Par Window Forward (PFW) is designed for companies that need to hedge multiple future transactions simultaneously while retaining the flexibility to adapt to changes in the timing of international payments and collections.
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