Banking · Foreign Exchange Risk Management
In the context of foreign exchange risk management, a bank's 'Net Open Position' in a specific currency, which represents its exposure to exchange rate fluctuations, is generally calculated as:
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- 1The total volume of foreign currency transactions processed by the bank during a single trading day.
- 2The sum of the net spot position, the net forward position, and the net delta-based equivalent of foreign currency options.✓
- 3The difference between the bank's total foreign currency reserves and its Statutory Liquidity Ratio (SLR) requirements.
- 4The ratio of foreign currency denominated retail deposits to the total corporate loan portfolio.
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The sum of the net spot position, the net forward position, and the net delta-based equivalent of foreign currency options.
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