Managing Exchange Rate Risk

Managing Exchange Rate Risk

Introduction

Both assets and liabilities are exposed to currency risk and danger of exchange rate risk. They are not only the companies that operate in foreign trade, but virtually every business area that has anything to do with the relationship between the local currency to the currency of the another country currencies.

Settlement of the foreign contractors, payments for materials and services, repayment of loans in foreign currencies, investment funds, costs incurred in other currencies are just some of the areas where this concept is relatively important. There are many methods to manage currency risk and ...