About Dual Currency Investment (DCI)
Dual Currency Investment (DCI) is an investment product, a combination of two financial instruments namely FX Options (derivatives) and Deposits (non-derivatives) that can provide higher interest rates than conventional deposits.
Customers may invest using 2 (two) currencies such as the USD, AUD, EUR, GBP, SGD, and JPY with a flexibility short tenor from 1 (one) week to 1 (one) year.
Why invest?
- To get a higher interest income.
- To invest in short-term yield enhancement products and feel comfortable about the risk of currency conversion to receive returns in alternative currencies.
- To diversify assets.
Illustration of Dual Currency Investment
| Currency | GBPUSD |
| Tenor | 21 days (3 weeks) |
| Amount |
GBP 100,000.00 |
| Ref Spot | 1.3892 |
| Strike | 1.3917 |
| Interest (p.a) | 10.00% |
Scenario 1
On fixing date, if the GBPUSD exchange rate is below or at the strike exchange rate, the return will be:
GBP 100,000.00 x 10% x [21/365 days] = GBP 100,575.34
Scenario 2
On fixing the date, if the GBPUSD exchange rate is above the strike rate, the return will be:
(GBP 100,000.00 x 10% x [21/365 days] x Strike Exchange Rate 1.3917 = USD 139,970.70 *
* The value of USD 139,970.70 if converted to GBP using current Spot rate, will be lower than the Initial investment value in GBP
Risk Considerations
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