By Moiz Mujtaba, Director Product Management – CRMS
For Corpay
With continuing uncertainty in the global economy, central banks are using interest rates as levers to manage regional inflation. This increases currency volatility.
Thus foreign exchange (FX) risk management increases in complexity for many small and mid-size enterprises (SMEs) because most of theircashflows are subject to changeable exchange rates.
While your organization may be focused on driving a robust FX risk management practice, it is a multi-faceted undertaking, involving a range of analyses, modelling outcomes, and “decision gates.” Taking it step by step makes it much less daunting.
In our blog series on developing and implementing your tailored hedging strategy, we take a ‘best practices’ approach to help you understand the process and outline the steps you may take to analyze exposures, create a hedging policy, implement and manage your hedging strategy.
The first step in risk management is to analyze FX exposure and measure the effects ofthe movement of rates on the company’s liquidity.
Monitoring cashflows from distributed windows or different platforms is a time-consuming, painstaking process.
Your liquidity is tied to cashflows, which may help you identify transactional risk that could occur from a specific exposure.
Move past this stage with flying colors and you can execute an informed hedge to mitigate your exposure.
Analysis of the risk profile for each currency in your cashflow forecast takes you far in defining your tailored hedge strategy—one that matches your business profile.
Here are a few best practices that may help you streamline your risk exposure analysis:
To discuss your cross-border needs please contact Danielle Orcutt, National Account Manager, Corpay (Fleetcor NYSE FLT) +1-929-504-8791 danielle.orcutt@corpay.com https://payments.corpay.com/cross-border
About Corpay
Global businesses trust Corpay Cross-Border to power their international payments, execute plans to manage their currency risk and support their growth around the world. We aim to deliver unmatched service and expertise with respect to moving money globally. Utilizing our proprietary payment automation technology and currency risk mitigation solutions, we take pride in connecting companies large and small with the global financial markets and businesses all over the world. You can feel confident working with Corpay, as we are backed by our parent company, FLEETCOR Technologies, Inc. (NYSE:FLT) a leading global business payments company based in Atlanta, Georgia, USA. FLEETCOR is a Fortune 1000 firm, an S&P 500 member and has USD $2.8B in annual revenue with a market capitalization of USD $18.2B (as of December 31, 2021).
To learn more contact Danielle Orcutt, National Account Manager, Corpay 929-504-8791 danielle.orcutt@corpay.com https://payments.corpay.com/cross-border
