How to minimize currency risks?
Posted: Sun Jan 19, 2025 5:23 am
To reduce a company's currency risks, hedging (insurance) is used.
Correctly selected hedging instruments and algorithms for a specific currency risk can reduce the currency risk of an exporter or importer.
On the topic: What to do if the company's investment policy does not work
To manage currency risk, companies and investors algeria whatsapp number data use various financial instruments and hedging strategies. In particular, protection against currency risk can be provided by forward transactions, options, futures contracts and currency swaps.
Forward operations
This tool allows you to fix a future exchange rate for transactions that have not yet occurred, which provides greater control over currency risk. A company can enter into a contract to buy a currency at a certain rate to ensure stable payments.
Options
Such contracts allow the company to sell currency at a certain rate, but they do not necessarily have to be used. In the event of a more favorable situation, the transaction may not be executed or executed partially.
Correctly selected hedging instruments and algorithms for a specific currency risk can reduce the currency risk of an exporter or importer.
On the topic: What to do if the company's investment policy does not work
To manage currency risk, companies and investors algeria whatsapp number data use various financial instruments and hedging strategies. In particular, protection against currency risk can be provided by forward transactions, options, futures contracts and currency swaps.
Forward operations
This tool allows you to fix a future exchange rate for transactions that have not yet occurred, which provides greater control over currency risk. A company can enter into a contract to buy a currency at a certain rate to ensure stable payments.
Options
Such contracts allow the company to sell currency at a certain rate, but they do not necessarily have to be used. In the event of a more favorable situation, the transaction may not be executed or executed partially.