Finalto announced today that it has expanded its non-deliverable forwards (NDFs) offering with the addition of Taiwan’s dollar to its trading platform.
The development gives Finalto users both in Asia and other regions more access to emerging markets, while bringing greater efficiency and reduced operational complexity.
Taiwanese dollar has become a favorite proxy for market risks in Asia triggered by Russia’s invasion of Ukraine. Finalto says that the step helps meet the needs of its corporate and institutional clients, including local banks, pension funds, hedge funds, brokers and end users, for hedging and execution of real Asian FX and non-deliverable forwards business.
In addition, users benefit from improved counterparty risk management and increased capital efficiency, with liquidity and access restricted to end users, which increases reliability.
NDFs comprise a small portion of overall FX turnover but the product has experienced impressive growth in recent years as it provides a way to trade spot FX in restricted markets where currencies are not deliverable. NDFs are distinct from other currency products because they do not have central exchange or delivery. Rather, the trades are cash settled based on the difference between the exchange rate at the time of the trade and the exchange rate at maturity.
Commenting on the move, Neil Wilson, Chief Markets Analyst at Finalto, said: “Taiwan’s dollar fell 10% against its US counterpart in 2022, its steepest decline in 25 years as Fed rate hikes boosted the greenback. The Taiwan currency declined to its lowest level in over five years in the face of the stronger dollar, with the country’s central bank actively intervening in the market to stem its decline. Since then, we have seen some recovery in the Taiwan dollar as USD longs unwind positions on expectations the Fed is about to slow and stop rate hikes.”
The past few month has seen Finalto consistently focus on upgrading its offering, culminating in the winning of Best B2B Liquidity Provider (Prime of Prime) at FMLS22 Awards, just five months after bagging the same award at the Ultimate Fintech Awards in June.
Finalto boasts a wide range of services and solutions to create the perfect technology proposition for a brokerage business. That includes a complete end-to-end solution consisting of front-end platforms, back-office administration, risk management tools, pricing tools and enhanced connectivity.