After the recent win of a large construction project in Kuwait, worth in excess of USD1bn, we found ourselves exposed to exchange rate fluctuations in an increasingly volatile environment. What's more, we had access to a limited number of banks in Korea that could pair USD/KWD (Kuwaiti Dinar) currencies, let alone hedge Kuwaiti Dinar receivables.
To help us set up USD/KWD dealing capabilities we chose ANZ. They already had a strong reputation in the Korean shipbuilding and construction industry for providing long-term hedges for USD/KRW and G10 currency pairs. Plus, a proven track record in the set up and dealing of non-traditional currency pairs, such as USD/VND Non Deliverable Forward’s (NDFs).
The solution they provided included:
- Education on the dealing conventions of Middle Eastern currencies as well as their historical trend and outlook.
- The setup of USD/KWD dealing capability within ANZ and informing us on currency updates, market trends and currency conditions.
- The hedging of KWD receivables with ANZ along with regular updates on USD/KWD rate market trends and trading conditions.
- Safe hedging of our KWD exposures through KWD FX forwards to minimise the risk against vast movements of KWD against USD.
Our customer would like to remain anonymous.