Raiffeisen taps fintechs to automate FX hedging for bonds

Raiffeisen Bank International (RBI) announced that it’s partnering with fixed income trading software company, AxeTrading, to provide real-time streaming of FX prices into bond trading workflow. RBI can provide faster and better pricing for their clients in local currency bonds while significantly reducing their request for quote (RFQ) response time and increasing their hit ratios.

By combining the capabilities of the AxeTrader Quoting and Execution Management System (QEMS) and fintech Integral’s BankFX pricing engine, RBI can significantly reduce their risk as a market-maker by automatically hedging the currency exposure of the bond trade and reduce hedging costs on the back of high-quality FX execution.

The AxeTrader QEMS automatically makes a Request for Stream (RFS) to the Integral BankFX pricing engine, which then provides real-time streaming prices via an API directly into the RBI bond trader’s RFQ workflow for efficient and transparent pricing. When the bond trade is completed, the corresponding FX transaction is automatically executed by RBI’s own FX trading desk.

This solution is applicable to all traders in local currency bonds who need certainty, clarity and efficiency at the same time capturing as much of the spread with an automated workflow, making trading as profitable as possible and automatically hedging the associated FX risk.

Harald Müller, head of Group Capital Markets Trading and Institutional Sales at RBI, said in a statement that “the already available integration supports current and future digitization and automation initiatives in RBI’s Capital Markets area, on top of enhancing our current infrastructure.”

Ralf Henke, CEO of AxeTrading, said in a statement: “The effective use of APIs and adoption of common standards drive our clients beyond the legacy technology providers with their limited ‘walled gardens’.”

Read the full release

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