How Do International Businesses Seek To Minimize Foreign Exchange Risks?


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amber Jhon Profile
amber Jhon answered
There are various strategies which are adopted by the companies in International business to avoid foreign exchange risks. The first strategy is to pursue local currency loans first, and these loans have low complexity and low to moderate cost. Companies also go for hedging to avoid foreign currency risks. Hedging is the practice in which you make two investments in two different currencies. So that, if the value of one currency goes down then other may go up and you may face no risk. This strategy has high complexity and moderate to high cost. Companies also make policies with the foreign companies to manage their foreign exchange risk however, it cannot be achieved very easily. There are various other alternatives but these are some of the most commonly used techniques for lowering foreign exchange risk.
Anonymous Profile
Anonymous answered

I always hear about different strategies but all the words are so vague. Can you please explain it clearer? When it comes to me, I can expert option login and it will make it beneficial for me to trade. However, I still wanna know more about strategies

Chips Ters Profile
Chips Ters answered

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