By (Reuters) – Bank of America on Monday extended its guaranteed exchange rates by up to one year, the longest tenor in the industry, in an effort to reduce the risks to cross-currency transactions amid rising volumes.
A locked-in foreign exchange spot rate would help companies mitigate exposure to currency fluctuations and simplify treasury management processes such as forecasting and reconciliation, the bank said.
“For corporate treasurers, volatile FX markets exacerbate the challenge of cash flow forecasting,” said Daniel Stanton, head of transactional FX in global payments solutions at Bank of America.
“Securing guaranteed FX rates of longer tenors can help them improve forecasting, which will lead to better informed decision-making,”, Stanton said.
Much of the cross-border payments are generated by businesses in e-commerce, services and manufacturing industries.
(This story has been refiled to fix dateline)