BofA Extends Guaranteed FX Rates Up To One Year, Industry's Longest Tenor

Bank of America (BofA) has extended guaranteed foreign exchange rates (FX) for up to one year -the longest tenor available in the industry - to help companies mitigate risks from currency fluctuations amid rising transaction volumes.

The move would help manage cross-currency payments and receipts better and simplify important tasks like forecasting and reconciliation, the bank said.

BofA's latest guaranteed FX rates offer is the longest tenor available in the industry today designed to support the rapid growth in both the volume and value of cross-border payments, driven by businesses in e-commerce, services, manufacturing, and the gig economy, as well as advancements in technology.

The bank's clients can get access to Guaranteed FX Rates through the CashPro platform and Swift.

"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 a statement.

"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," Velani added.

In the 8th year since the bank launched guaranteed FX rates with tenors longer than 24 hours, the development of the solution has seen significant progress over the years.

Currently, the solution supports more than 200 currency pairings across various tenors, with the 1-year tenor now available for 37 currency pairs.

The number of currencies eligible for Guaranteed FX Rates has steadily increased in response to client demand. Additionally, clients who went live with Guaranteed FX Rates in 2024 have contributed to over 20% of the volume growth year-to-date, indicating an ever growing demand and adoption of this solution.

Some of the currency pairs with the highest volumes include USDMXN, EURUSD, USDCAD, GBPUSD, EURCZK, and AUDUSD.

"For corporate treasurers, volatile FX markets exacerbate the challenge of cash flow forecasting. Securing guaranteed FX rates of longer tenors can help them improve forecasting, which will lead to better informed decision-making." pointed out Daniel Stanton, head of Transactional FX in Global Payments Solutions at Bank of America.

The BofA serves around 69 million consumer and small business clients through approximately 3,700 retail financial centers in the United States, its territories, and more than 35 other countries.