Bank Of America Unveils Longest Foreign Exchange Rate Guarantee

Bank of America Corporation BAC shares are trading lower premarket on Monday after the firm stated that it is streamlining foreign exchange (FX) risk management for cross-currency payments and receipts.

The bank introduced Guaranteed FX Rates of up to one year. That’s the longest tenor in the industry, Bank of America says. This solution will help companies reduce exposure to currency fluctuations and simplifies treasury management tasks like forecasting and reconciliation.

This year marks the eighth anniversary of Bank of America’s introduction of Guaranteed FX Rates beyond a 24-hour tenor.

The solution has evolved to support over 200 currency pairings and multiple tenors, with demand driving an increase in eligible currencies.

The one-year tenor is now available for 37 currency pairs, including high-volume pairs like USD/MXN, EUR/USD, USD/CAD, GBP/USD, EUR/CZK, and AUD/USD.

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

Notably, clients who adopted the Guaranteed FX Rates in 2024 have contributed over 20% to year-to-date volume growth.

Recently, Bank of America reported a third-quarter net income of $6.9 billion, beating estimates with EPS of $0.81, though down 12% YoY due to rising expenses.

Investors can gain access to the stock via First Trust Nasdaq Bank ETF FTXO and Invesco KBW Bank ETF KBWB.

Price Action: Bank of America shares are down 0.21% at $42.23 premarket at the last check Monday.

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