FX Buffer
Category: Finance
Definition (plain English)
A pricing or costing allowance added to protect margin against adverse exchange-rate movement before the supplier, freight, duty, or customer payment is settled.
Why it matters commercially
An FX buffer helps teams decide whether a quote has enough room to absorb currency movement without emergency repricing or margin leakage.
Example
The pricing team added a 3% FX buffer to a USD purchase priced for a EUR customer because the deposit and balance would be paid six weeks apart.
Common mistake
Using one flat FX buffer for every currency and order instead of considering volatility, payment date, quote validity, supplier currency, and margin depth.
Use this in CommerceKit
Landed Cost
Use tool →Target Buy Price Calculator
Use tool →Currency Exposure & FX Buffer Calculator
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