Unhedged foreign currency exposure

Hey! On your query about Packing Credit loan and foreign currency exposure:

1. Should Packing Credit loan outstanding be shown under FCY payables?

• Yes, Packing Credit loans are foreign currency loans extended by banks to exporters to finance their working capital needs.

• Since it is a liability in foreign currency, it should be shown under Foreign Currency (FCY) Payables as part of your foreign currency exposure.

2. Under Hedged or Unhedged Foreign Currency Exposure?

• Packing Credit loans are generally considered as foreign currency liabilities taken to finance export receivables.

• Whether it is hedged or unhedged depends on whether you have taken a foreign exchange hedge (like forward contracts, options, or swaps) to cover this exposure.

• If you have hedged the Packing Credit loan exposure (say via forex derivatives), it should be shown under Hedged Foreign Currency Exposure.

• If you have no hedge for this loan, it should be reported under Unhedged Foreign Currency Exposure.

Summary: