Citigroup answers questions on FX Benchmarking.

First Published: e-Forex Magazine 19 / The e-Forex Surgery / July, 2005

With Gerardo Sacco and James Dalton, Vice Presidents, Citigroup FX eCommerceWhy is the benchmarking of foreign exchange rates becoming such an important aspect of operations within the international corporate and financial communities?There has been increasing recognition of the differences between passive and active foreign exchange execution taking place within Financial Institutions and Corporations. Many firms have identified that the allocation of resources to a process where there are unquantifiable returns is a strategic flaw, particularly when there are Benchmarking execution mechanisms available. Why take the time to compete a price, when you can be absolutely guaranteed of a fair and representative market fill for all exposures that you do not seek to actively trade throughout the course of the day.There are a number of FX Benchmark fixings, for example those provided by central banks, performance measurement companies and major FX dealing banks. How do they differ and are they targeted at...continued

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