FOREX RISK MANAGEMENT
During the pandemic, in the charming city of Kolkata, a middle aged lady and her tech-savvy daughter started a cloud-bakery called "The Sweet Spot." The mother, Sharmila, whose tarts and bruschettas ....
“All I want is a room somewhere Far away from the cold night air Lots of chocolate for me to eat Lots of coal makin' lots of heat Warm face, warm hands, warm feet Oh, wouldn't it be loverly?” So ....
When it comes to forex hedging, the Forward Contract offered by the banks is the most preferred instrument, used by all the exporters and importers. However, there are times when the banks are in ....
To see where the Indian Rupee is going we look at 50 factors. Yes, you read it right, 50 factors. Click Here to see the video Those include global currencies (Euro, EM Currencies etc), eq ....
Very frankly, as forex advisors, the onus lies on us to win the respect of our clients. This piece of thought is for ourselves at Kshitij.com as well as for our peers in the forex advisory space. ....
Many a times I think the forex risk management practice resembles physical fitness. Everyone knows it is very important, but very few people do anything at all about it. Among those who hedge, fe ....
Yes, it is true. Like in all other important aspects of life, in forex hedging also, size indeed matters. Remember that old formula, R = p.q, or Revenue (or Outgo) = Price x Quantity? ....
August 2018 has been a trying time for Importers because Rupee has depreciated to its weakest ever level of 70.39. In this video we show how our Reliable long-term Dollar-Rupee forecasts and systemat ....
The old financial year is over. The accounts are done and profit/ loss has been calculated. Hopefully you would have seen a good growth in turnover and profits. And, in the case of your Imports/ E ....
Forecasts and Accountability Everybody loves a forecast and wants to know where Dollar-Rupee is headed. This is natural because forex is the business of every importer/ exporter. Even the RBI conducts ....
Here's another very important MS Excel tip, one that I got from one of our clients. It has made my life so much simpler. Thank you, Krishnan! Need for Weighted Average Let us say there is a company ....
98% of companies do not use specialized software to track their exposures (like Letters of Credit, Buyers' Credits, Rupee Packing Credit etc) and hedges (like Forward Contracts and Options). All the w ....
YOUR BOSS NEEDS TO SEE THIS I would be a rich man if I had a Rupee for every time I have heard the phrase "Forex is not my business" from corporates with forex exposures. Please show this article to y ....
Forex risk management is a frustrating experience for most companies. There seem to be a thousand things that can go wrong at any time - the economy, the market, the forecasts, the regulations, the sh ....
An astounding thing we have encountered while advising companies on forex risk management is that almost no company has allocated a budget for meeting forex hedging costs. Companies may have voluminou ....
Cash-Spot is one of the lesser known technical concepts in the forex market. Nothing earth shattering, really, but it is always good to know the technical details of the market we operate in. The fore ....
Most exporters price their goods on a “cost plus” basis. They add a certain cushion for forex volatility to their domestic costs and quote a Dollar price accordingly. Importers take whatever Dolla ....
This might be a little basic for old hands in the market, but there is often a misconception among new entrants that the Forward Rate is a forecast of where the rate is going. For instance, if on 09-M ....
Many clients we work with, especially SME clients, and more especially Exporters, tend to prefer an “Option Period” Forward Contract rather than a “Fixed Date” Forward Contract. Option Perio ....
One of the most agonizing difficulties commonly faced by the risk manager is not knowing where the market is likely to go. This makes it nearly impossible for him to decide whether to hedge or not to ....
Most corporate risk managers refer to their hedges, such as forward contacts, as their "market position". They think that taking a hedge is the same as taking a trading position in the market. This is ....
Rupee Volatility has increased The last couple of years have been particularly painful for Corporate India in many ways. Forex Risk Management has been one of the ways by which several hundred crores ....
At a time when there has been a big jump in risk aversion in global financial markets, this article challenges two revered canons of forex risk management. The article will first build a case that com ....
Gentle Reader, In this issue, we take a detailed look at the pros and cons of the to-be-introduced exchange traded Dollar-Rupee Futures The RBI has been working on the introduction of Rupee Futures ....
It is an open secret that every Corporate Hedger wants to pay no more than Zero for an Option that he buys. Banks oblige by constructing “zero cost” strategies. The concept of zero cost structures ....
Good to be with you again, Gentle Reader! This issue talks about: The need for focusing on the Currency Risk Management Process in the Corporate sector Please keep those comments coming. We love ....
Very few companies have adopted a formal plan or strategy for managing FX Risk. Amongst the few that have, most work on the basis of a fixed (static) benchmark for the whole year. We think Benchmarks ....
Netting – An outdated concept? A company has both Imports and Exports. Should it manage the FX Risk on both legs, i.e. on Gross basis? Or on the differential amount, i.e. on Net basis? Many companie ....
In the issue dated 25-Aug-04 we presented the case of a corporate that stuck to its long term objective even in bad times on a currency swap that went very bad initially; but ultimately booked hands ....
In this Issue Series on Issues in Corporate Risk Management - Part 2 - Stick to Objectives Issues in Corporate Risk Management Keep the Objective in mind. It pays The definition of proper Obje ....
A Tale of Two E-mails.....As many of you know, we provide a twice-daily trade recommendation service called "FX Thoughts of the Day". We are one of the several such services on the Internet and cann ....
FOLLOW UP - Bear SHS in Sterling? In the last issue we had pointed out a three decade old Downtrend Resistance on the GBPUSD Monthly chart, which presaged weakness in GBPUSD. Technical Analysis is ....
A few words…This is the second issue of “The Colour of Money” after its revival. Many of our old Readers have written to say they are glad to receive this publication again. We thank them for th ....
In our Oct-24 report (01-Oct-24, US10Yr @ 3.79%), we had said that in contrast with history, there were no immediate signs of a US recession and the earlier it could set in might be in Jan-Mar 2025, or maybe even later. We also favored just a slowdown, or at most a shallow recession. In accordance with this, the US data in October has been mixed to strong …. Read More
In our Oct-24 report (3-Oct-24, Brent $74.98), we had expected Brent to trade within $80-60 in the coming months. We had laid out a possibility of downside extension to $55-50 in case of a US recession in the Jan-Mar’25 quarter. Else a shallow recession or slowdown could limit the downside to $60. Brent remained above the Sep-24 low of $68.68 through Oct-24 trading within the broad $81.16-69.91 region, in line with our broader mentioned range of $80-60. … Read More
After Donald Trump’s victory in the US elections, will the Dollar Index fall in the coming months aiding Euro strength? Or will aggressive rate cuts by the ECB and political uncertainity in Germany and France continue to put downside pressure on the Euro? ……. Read More
Our November ’24 Monthly Dollar-Rupee Forecast is now available. To order a PAID copy, please click here and take a trial of our service.
Our November ’24 Dollar Rupee Monthly Forecast is now available. To order a PAID copy, please click here and take a trial of our service.