What is a Currency Protection and Participation Contract?

A Currency Protection and Participation contract allows you to choose a rate that protects you from exposure to adverse movements beyond this nominated level; at the same time providing you with the opportunity for unlimited participation in favourable movements beyond it.

Exchange rate at maturity will be the more favourable of either the protection rate or the prevailing spot rate, each adjusted to include the protection margin.

Benefits

  • Provides you with the protection of a worst-case exchange rate.

  • Enables you to participate in favourable movements in exchange rates.

  • There's no upfront premium payable.

Considerations

  • The cost (or protection margin) is embedded into the rate of exchange at maturity.

  • You have an obligation to transact at maturity.

  • Cancellation of the contract may incur a cost or benefit to you.

What else do I need to know?

Currency protection and a participation contract could be suitable for:

  • Australian importer/exporter, or a business with payments or receipts in a foreign currency.
  • Where you don’t want to pay an upfront cash premium.

More information

Full Participation FX Solutions Products - Product Disclosure Statement (PDF, 281KB), opens in new window

Managing foreign exchange

Movements in foreign exchange rates can impact businesses differently, so it's important to have a strategy tailored to your specific needs.

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Managing FX risk with Forwards

Learn how you can lock in the exchange rate for the purchase or sale of a currency on a future date.

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Terms and Conditions

The information provided in this webpage is intended to be of a general nature only. It has been prepared without taking into account your objectives, financial situation or needs. Before acting on any information that you read on this webpage, National Australia Bank Limited (ABN 12 004 044 937, AFSL and Australian Credit License 230686) (NAB) recommends that you consider whether it is appropriate for your objectives, financial situation and needs. NAB recommends that you seek independent advice and obtain and consider the relevant Product Disclosure Statement (available at Financial Markets or by calling 1800 307 827), before acting on any information on this webpage, including whether to acquire or to continue to hold a product or service mentioned.

The products on this webpage are issued by NAB.

Please consider our Financial Services Guide.

Target Market Determinations for these products are available at nab.com.au/TMD.