Foreign exchange position – the balances of bank foreign exchange assets and liabilities that generate the risk of obtaining additional revenues or expenditures upon the modification of exchange rates.
The foreign exchange
position shall be considered open if foreign exchange assets in a certain foreign currency are not equal to foreign exchange liabilities in
the
respective foreign currency.
The value of the open foreign exchange position represents the difference between the amount of foreign exchange assets in a certain foreign currency and the amount of
foreign exchange liabilities in the respective currency.
The open foreign exchange
position is long if the sum of foreign exchange
assets in a certain foreign currency exceeds the sum of foreign exchange liabilities in the respective foreign currency.
The open foreign exchange
position is short if the sum of foreign exchange liabilities in a certain foreign currency exceeds the sum of foreign exchange assets
in the respective foreign currency.
The foreign exchange position ratio represents the percentage ratio between
the
value of the open foreign exchange position (recalculated in Moldovan lei) and
the
value of the total regulatory capital of
the bank.