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Managing Currency Risk

Gedamo_Currency_RiskThe currency risk is one of many kinds of risk to which the organization is exposed. Mainly due to the undertaking of the company in foreign trade, investments from financial or physical outside national boundaries, obtaining of financing in foreign currencies. The great variability that we observe in recent years in foreign exchange markets may be a factor that affects the financial results or competitive position of the company. The decline in earnings from exports from, the high cost of raw materials or imported goods and higher cost of debt, are the most common problems in case of lack of an appropriate system of financial risk management. The problem of currency risk is increasingly often individuals because of the increasing popularity of loans made in foreign currencies.

Considering the above definition, risk management can be defined as a de facto restriction of the possible deviations of the value of individual assets from planned or expected value. This can be achieved through prudent financial markets operations.


Risk Management

The manage department of Gedamo is able to stabilize the value of future cash flows in foreign currency at the current level or at a level assumed.
Approach to risk management can differentiate two concepts:

Conservative approach: is linked to full implementation of security currency position so as to prevent changes in the price of changing cash flows. This means we can now, regardless of currency fluctuations, define the value of the sum due, future payments or mortgage payments in the currency concerned.

Active approach: risk management can take the form of active management of the currency position. In this way consciously decide to leave the currency shown in a partial or complete, awaiting favorable variations of the cross. The safety position (also full) may take place when we are convinced that the course of the currency is bad for us.

Basic benefits arising from the management of currency risk:

  • Elimination or reduction of the influence of price movements on foreign exchange profits made or costs incurred.
  • Improvement of planning and cash management and disposal of additional financial costs.
  • Ability to leverage current prices and advantageous to define the value of future cash flows.


Building on our experience and our presence on the currency market, we are pleased to offer such services in the implementation of monetary economics. Working with us, you can save time and costs associated with the common activity on the foreign exchange market. We have a qualified group of analysts, thanks to their knowledge and experience, are characterized by a perfect orientation in various situations is that the daily market.

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