Minimizing the currency risks of enterprises in the conditions of international economic relations
Journal Title: Економіка. Фінанси. Право - Year 2019, Vol 4, Issue
Abstract
Introduction. Activities of economic entities in the context of international economic relations proceeds under the influence of currency risks. In Ukraine, the problem of minimizing currency risks of enterprises was particularly acute after a significant devaluation of the UAH in 2014-2016. Such fluctuations of the exchange rate are negatively reflected in the financial results of enterprises due to a lack of expected revenues. So, importing raw materials and materials, the company loses from the increase of the exchange rate of the corresponding foreign currency in relation to the national currency. The decrease of this course determines the financial losses of an enterprise when exporting finished goods. Therefore, there is an objective need to build an effective system for minimizing foreign exchange risks of enterprises in the context of international economic relations. Purpose. The purpose of the article is to develop theoretical, methodological and practical recommendations for minimizing the currency risks of enterprises in the conditions of international economic relations. Results. The study of the influence of currency risks on the activity of enterprises in the conditions of international economic relations is fulfilled. The essence of currency risk is specified, its source and main factors of appearance are determined, on the basis of which the classification of currency risks is improved and the peculiarities of their manifestation at the enterprises in the conditions of international economic relations are substantiated. It is substantiated that currency risk in the conditions of international economic relations is an inevitable phenomenon. And even if the company is not a direct exporter or importer, total dollarization of the domestic economy leads to a permanent appearance of currency risks. Therefore, an enterprise needs to learn how to minimize the impact of currency risks on its activities. The complex method of currency risk minimization is developed that will enable the company to optimally combine the level of reduced currency risk with costs for its reduction and significantly reduce the amount of expected losses from their occurrence. Conclusion. The research carried out has revealed that currency risks are unchanged satellites of enterprises in the conditions of international economic relations. Foreign exchange risk does not always mean loss, it is for the enterprise to risk it - it will mostly be able to obtain additional profits in the conditions of international economic relations and intense competition. It is important for the company to learn how to minimize risks. The proposed sequence of minimization of foreign exchange risks of enterprises in the conditions of international economic relations will allow us to systematically approach the problem at the decision-making stage and achieve the optimal correlation between the expected losses from the onset of identified currency risks and the cost of the measure to reduce them.
Authors and Affiliations
Halyna Liubomyrivna Verbytska
Keywords
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