Work out nostro balance requirement instantly with clear inputs, formula shown and shareable results.
A nostro account funds settlement in a foreign currency, so it must cover the settlement cycle plus a buffer for timing mismatches. Those balances earn little, which is why the carry cost is a genuine treasury expense.
Nostro requirement
Required = daily outflow × settlement days × (1 + buffer)
Figures are estimates based on the inputs given. Bank charges, regulatory minima and market rates change and differ between institutions and jurisdictions. This is not financial advice — confirm with your bank or treasury policy.
Idle foreign balances earn poor returns and consume balance sheet, so treasury minimises them subject to settlement risk.
Payments fail or attract overdraft charges from the correspondent, both of which are expensive and reputationally damaging.