Bank of America Extends FX Rate Guarantee for Year

Bank of America now allows companies to lock in foreign exchange (FX) rates for up to one year.

The Guaranteed FX Rates offering simplifies the management of FX risk associated with cross-border payments and receipts, mitigates exposure to currency fluctuations and simplifies treasury management processes, the bank said in a Sunday (Oct. 20) press release.

“When FX risk is managed appropriately and efficiently, it can bring enormous value to companies that process large volumes of cross-border payments,” Bhupen Velani, head of transactional FX trading in global markets at Bank of America, said in the release. “As our clients’ business models have evolved, these volumes have increased, and so too has the appeal to lock in FX rates with longer tenors.”

The offering serves a market in which the volume and value of cross-border payments continue to increase, driven in part by innovations in technology and by businesses in the eCommerce, services, manufacturing and gig industries, according to the release.

Bank of America’s Guaranteed FX Rates supports more than 200 currency pairings across multiple tenors, with the one-year tenor available in 37 currency pairs, the release said.

The bank’s clients can access Guaranteed FX Rates through its CashPro digital banking platform and via Swift, per the release.

“For corporate treasurers, volatile FX markets exacerbate the challenge of cash flow forecasting,” Daniel Stanton, head of transactional FX in global payments solutions at Bank of America, said in the release. “Securing guaranteed FX rates of longer tenors can help them improve forecasting, which will lead to better-informed decision-making.”

Solving for cross-border payments is becoming a financial frontier that is impossible to ignore as global markets open up, Chandana Thanthrige of Bank of America, told PYMNTS in an interview posted Tuesday (Oct. 15).

“If you look at the cross-border payment space over the last five years, the payment volumes have grown,” Thanthrige said.

Guaranteed FX rates stand out in cross-border commerce because they provide clients with real-time rates, ensuring they can manage FX exposures without engaging in more complex hedging strategies, Thanthrige said.