"We’re delighted to have agreed to this partnership with Efic"
Under the new partnership, Efic will guarantee foreign exchange facilities offered by AFEX to exporters, enabling the foreign exchange specialist to increase the trading limit for clients. With increased limits, those clients will be able to protect more of their export contracts and better secure profit margins.
A foreign exchange facility can help exporters protect themselves from exchange rate fluctuations by locking in exchange rates and allowing them to hedge their currency exposure.
"We’re delighted to have agreed to this partnership with Efic," said Richard Poulton, Asia Pacific General Manager, AFEX. "It’s a powerful endorsement of the quality of our offering and strong position in the market. Australia relies heavily upon its export markets and it’s vital that businesses targeting overseas sales are well protected against ongoing and inevitable currency volatility."
Alex Fernandez, Efic’s Head of Alliance & Product, SME, said, "We’re excited to offer Australian exporters even more support and protection in their international activities through this new partnership with AFEX, a trusted player in the foreign exchange market."
AFEX continues to grow rapidly in Australia, roughly doubling its client base to 8,000 businesses in the last two years alone. It opened the first of three offices in Sydney in 2005, with Perth and Melbourne following in 2009 and 2011 respectively. Recent currency volatility demonstrates the need for the sophisticated payment and tailored risk management expertise AFEX is renowned for.
Measuring the effect of AUD currency volatility
The AUD USD currency pair regularly has moved more than 15% from the high to low during the last twelve months, more than enough to wipe out profit margin for many export businesses should they not put in place a hedging strategy.
For example, an exporter who took an order for USD 100,000 at the beginning of the year when rates were around 0.89 but was only taking receipt of payment now would be over AUD 6,000 worse off due to exchange rate movements.
AFEX offers a range of solutions, such as locking in the exchange rate payable on future transactions, giving the business certainty as to its profits and the margins achieved.
