CONSIDERATIONS UPON THE SELECTION OF CURRENCY HEDGING STRATEGIES – BETWEEN OPORTUNITY AND APPLICABILITY
Journal Title: STUDIA UNIVERSITATIS PETRU MAIOR SERIES OECONOMICA - Year 2009, Vol 3, Issue 1
Abstract
In conditions of high exchange rate volatility, entities conducting foreign trade transactions are subject to currency risk exposures, which may have a significant impact on financial performance and operating profitability. The research approach is oriented to identify the possibility to implement viable strategies for currency hedging, as an essential component of risk management operations for entities holding assets or liabilities denominated in a currency. Research methodology is based on the analysis of derivative transactions (futures contracts), carried on Monetary Financial and Commodities Exchange of Sibiu (Sibex), for the purpose of defining viable strategies to hedge currency risk. As an alternative to the domestic financial derivatives’ market, in order to overcome certain deficiencies relating to the liquidity of financial instruments, it was also examined the Forex market, to test the opportunity of receiving protection against currency risks.
Authors and Affiliations
SPATACEAN Ioan Ovidiu, NISTOR Paula
Keywords
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