FIN.15:5.2 - Complete the partial-receipt hedge with actual interim finance
Continue the earlier physical-forward case. The customer has paid 60 foreign units and still owes 40. Buying the missing 40 at 0.95 costs 38 home units before the forward’s receipt of 90. Assume opening usable home cash is 20, the required reserve in this isolated case is zero, and an existing authorized facility can supply 18 net before the purchase. It requires repayment of 18.50 after the forward settles that day. There are no other fees or flows.
| Established event | Home cash after the event | Foreign cash after the event | Remaining relevant duty or claim |
|---|---|---|---|
| Customer receipt already available; before draw | 20 | 60 | Forward delivery 100; customer still owes 40 |
| Facility actually funds 18 | 38 | 60 | Facility repayment 18.50; forward delivery 100 |
| Spot purchase actually pays 38 and delivers 40 | 0 | 100 | Facility repayment 18.50; forward delivery 100 |
| Physical forward actually exchanges 100 for 90 | 90 | 0 | Facility repayment 18.50; customer still owes 40 |
| Facility repayment actually settles | 71.50 | 0 | Customer still owes 40 |
The net increase in home cash is 71.50 − 20 = 51.50. It equals the earlier transaction contribution of 52 less the finance cost 0.50. The closing balance is not 52, because opening cash and the financing movements also pass through the account. The customer claim is unaffected by settling the separate forward and facility.
If the draw only becomes usable after the purchase deadline, this route fails even though its end-of-day arithmetic balances. If the spot purchase is merely submitted, do not enter its 40 foreign units as delivered. An agreed alternative settlement arrangement could change the required route and funding, but an analyst’s netting of the numbers does not create it.