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An Indian customer who has imported equipment from Germany for Euro 10mn has approached a...

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Finance

An Indian customer who has imported equipment from Germany for Euro 10mn has approached a bank for booking a forward EUR/INR contract. The delivery is expected somewhere during the 6th month from the date of booking. The following rates were being quoted:

Spot - (Euro/ USD Spot)

1.118/20

3 month forward

10/12

6 month forward

20/22

Spot - USD/INR

66.40/2

3 month forward

110/115

6 month forward

215/225

Assuming the payment will be made on the day of receiving the equipment, what is the rate (EUR/INR) that the bank will quote to the customer for import payment? Bank may load profit margin of 5 paise. Please give your working in detail.

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