Foreign Exchange Risk
INTRODUCTION=Your business is open to risks from movements in competitors ' prices, raw material prices, competitors ' cost of capital, foreign exchange rates and interest rates, all of which need to be (ideally) managed.
This section addresses the task of managing exposure to Foreign Exchange movements.
These Risk Management Guidelines are primarily an enunciation of some good and prudent practices in exposure management. They have to be understood, and slowly internalised and customised so that they yield positive benefits to the company over time.
It is imperative and advisable for the Apex Management to both be aware of these practices and approve them as a policy. Once that is done, it becomes easier for the Exposure Managers to get along efficiently with their task.
|Exposure Analysis |[pic] |
| |The Colour of Money -Series on Forex Hedging |
|An Exposure can be defined as a Contracted, Projected or Contingent Cash|Current Issue :: Archives |
|Flow whose magnitude is not certain at the moment. The magnitude depends|Use a Forecast for Budgeting |
|on the value of variables such as Foreign Exchange rates and Interest |28th May, 2012 |
|rates. | |
|The company will determine and analyse its Foreign Exchange exposures. |
|Determination: |
|The following cash flows/ transactions will be considered for the purpose of exposure management. |
|Variable / Cash Flows
This section addresses the task of managing exposure to Foreign Exchange movements.
These Risk Management Guidelines are primarily an enunciation of some good and prudent practices in exposure management. They have to be understood, and slowly internalised and customised so that they yield positive benefits to the company over time.
It is imperative and advisable for the Apex Management to both be aware of these practices and approve them as a policy. Once that is done, it becomes easier for the Exposure Managers to get along efficiently with their task.
|Exposure Analysis |[pic] |
| |The Colour of Money -Series on Forex Hedging |
|An Exposure can be defined as a Contracted, Projected or Contingent Cash|Current Issue :: Archives |
|Flow whose magnitude is not certain at the moment. The magnitude depends|Use a Forecast for Budgeting |
|on the value of variables such as Foreign Exchange rates and Interest |28th May, 2012 |
|rates. | |
|The company will determine and analyse its Foreign Exchange exposures. |
|Determination: |
|The following cash flows/ transactions will be considered for the purpose of exposure management. |
|Variable / Cash Flows
References: 4. ^ "What is Foreign Exchange?". Published by the International Business Times AU. Retrieved: February 11, 2011. 11. ^ (page 130 of ) RA De Roover - The Rise and Decline of the Medici Bank: 1397-1494 Beard Books, 1999 Retrieved 2012-07-14 ISBN 1893122328 12