Exchange rate buffer calculator
An order quoted in a foreign currency is exposed to FX moves between quote and payment. Enter the order value, the pair's historical volatility and the payment horizon — the calculator suggests a buffer and compares it with what you already reserve.
Order & FX exposure
Suggested buffer
Suggested buffer amount
Value × volatility × √(days ÷ 30)
As a share of the order
Buffer ÷ order value
Your current buffer amount
Value × your buffer %
Shortfall / headroom
Suggested − current (negative = headroom)
Your buffer already covers (or exceeds) the suggested worst case.
About the model
FX moves roughly with the square root of time, so a 3 % monthly volatility becomes about 3 % × √(30 ÷ 30) = 3 % for a one-month payment window. The buffer is a budget guard, not a hedge: for large orders consider a forward contract, a currency hedge or paying in a stable settlement currency. Historical volatility does not guarantee future moves.
Planning an import? The landed cost calculator rolls freight, duty and tax into the final unit price.
Frequently asked questions
How is the suggested FX buffer calculated?
The suggested buffer is order value × volatility × √(days ÷ 30), because FX moves roughly with the square root of time. For a 50000 order with 3% monthly volatility and a 30-day payment window that is 50000 × 3% × √1 = 1500, or 3% of the order.
How much FX buffer should I reserve on a foreign-currency order?
Reserve at least the suggested buffer, which treats the pair volatility as the worst-case move over the payment horizon. A 3% monthly volatility over a 60-day window becomes 3% × √(60 ÷ 30) ≈ 4.24%, so a longer payment horizon needs a proportionally larger reserve.
What does the shortfall or headroom result mean?
It is your suggested buffer minus the buffer you currently reserve (value × your buffer%). If it is positive your current reserve is short of the suggestion for that horizon; if negative you already cover or exceed the worst case. The buffer is a budget guard, not a hedge — for large orders consider a forward contract.
Heuristic budget guard, not a hedge or a VaR model. For large orders consider a forward contract or settlement in a stable currency. ICBOMS provides this tool for reference only.