Hedging capabilities for Forex positions that arise from business operations involving foreign markets are key to successful treasury management. This can be particularly tricky in African countries where large currency fluctuations make it hard to predict the cost of raw or finished goods. This was a particular issue for a FiveWest manufacturing client in Malawi who had pending payments for overseas orders and wanted to hedge themselves against a drop in the Malawian Kwacha.

Solution

FiveWest assisted this company to purchase stablecoins in USDT. This was fortuities as the Malawian Kwacha devalued by 25%. The USDT was converted back to Malawian Kwacha for local payments and to make international payments to suppliers through the traditional banking system.

Result

This African company was quickly and cheaply able to hedge itself against a pending currency devaluation in a way that would not have been possible through its traditional banking system.