How can I protect my business against currency risk?
Foreign exchange risk, or currency risk, is related to the uncertainty of the exchange rate in relation to an exposure to a currency. When your business conducts international transactions, it is exposed to risks related to exchange rate fluctuations.
For a business, foreign exchange risk has two components:
- Transaction risk
If the currency in which the business buys its goods appreciates, it will increase its invoice from its suppliers
- Competitiveness risk
If the currency in which the business sells depreciates, it will have to charge higher prices to foreign consumers or reduce its profits
This is why it is essential to protect yourself with hedging instruments adapted to your needs.
For more information:
- Visit our Foreign exchange risk hedging page
- Download our guide
- Contact your account manager
