FOREX RISK MANAGEMENT
Hedging is the foundation of Forex Risk Management.
Hedging in Foreign Exchange refers to the practice of using financial instruments or strategies to reduce or eliminate the potential risks associated with currency fluctuations. The goal of hedging is to protect your business from losses caused by unexpected changes in exchange rates.
Whether your need is to minimise costs, increase efficiency or hedge future exposures, we have got the answers!
Our in depth knowledge of markets and expertise, will allow us to identify possible areas where value can be created in your business.
WHAT DOES KUDA FX DO?
- Spots | This is an immediate buy of currency at the current rate the exchange rate is. We can execute the trade on the same day, or the next day.
- Forward Exchange Contract | The promise to buy or sell something at a fixed price in the future, protecting both parties from price changes. It helps a business plan ahead and reduce uncertainty about future prices.
- Swaps | An agreement between two parties to exchange cash flows based on specific conditions, safeguarding them from risks associated with foreign exchange rates and protecting their money from unexpected changes.
- Options | Gives the holder the right to buy (call option) or sell (put option) foreign currency at a predetermined exchange rate on or before a specific date.
- Minimised conversion and FX costs
- Optimal forward points on forward contracts
- Best pricing on option contracts
OUR TAILOR-MADE HEDGING SOLUTIONS
Our team of experts can assist with hedging solutions to suite your business’ risk appetite and needs.
Why implement hedging….?
- Foreign currency hedging helps to reduce uncertainty and manage risk in a volatile currency environment.
- Hedging can protect a company from unexpected fluctuations in exchange rates, which can impact profits and cash flow.
- Without hedging, a company may face significant losses if the value of their foreign currency holdings decreases.
- Hedging can provide stability and predictability in financial planning, allowing companies to better manage their resources and investments.
- Overall, foreign currency hedging is essential for businesses operating in a global marketplace to mitigate risks and ensure long-term financial stability.