Reducing Risk of International Trade

When you're doing business overseas, adverse foreign currency movements could wipe out your profits or worse. So isn't it worth getting protection against foreign exchange risk?

Please note Foreign Exchange Risk Management services are not insurance policies.

Foreign exchange risk explained

The most common cause of foreign exchange (FX) risk arises from

• Making payments in foreign currency for your imports that are priced in a foreign currency
• Receiving foreign currency for your exports.

For example, suppose you are importing $100,000 worth of stock from a supplier in the Far East in three months time. If you simply wait and buy your US dollars in three months when you need to make payment, you have no idea how much that stock will cost you in EURO (€) terms because of FX fluctuations.

Failing to protect against movements in foreign exchange rates effectively means buying or selling without having agreed a price in EUROS (€). Can you afford to leave it to chance?

Exposure to foreign exchange risk can also arise from:

• Foreign currency borrowing or deposits
• Subsidiaries abroad
• Assets located abroad.

FX protection is an essential service for:

• Importers and exporters of goods and services
• Owners of assets abroad, joint ventures or partnerships
• Group companies and subsidiaries in more than one country.

How to get FX protection

Our specialist Global Markets team will work with you to develop a four point plan to help minimize your foreign exchange risk and protect your profitability.

• Understand your exposures
• Understand the solutions
• Develop a strategy
• Implement your plan.

If you would like to know how these services could help you, simply click on the banner below and contact us via our contact page.