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Structured Investments: What is dual currency investment (DCI)? How does dual currency investment work?

Dual currency investments (DCIs) are a form of structured investment where you are exposed to foreign exchange risks.

Under this structure, your investments are made in once (1) currency (called base currency).

At maturity, depending on the exchange rate, your banking institution has the option to pay out the principal plus interest in the base currency or in another currency (called alternative currency).

If you are paid in the alternative currency, you could incur a loss on your principal when you convert it back to the base currency if the foreign exchange rates did not move in the direction you anticipated.

You can select both the base currency and alternative currency.

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Reprinted with permission from BankingInfo (A Consumer Education Programme by Bank Negara Malaysia)


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Knowledge Base ID :   1457
Last Reviewed :   May 22, 2014
Source :   BankingInfo
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