Foreign Exchange Risk Managemen At Sharekhan Pvt Ltd

Abstract

Foreign exchange (FX) risk management is a crucial aspect of financial strategy for businesses operating in global markets. Currency fluctuations can significantly impact cash flows, profitability, and overall financial stability. This study explores the different types of foreign exchange risks—transaction, translation, and economic risks—and examines the various strategies companies employ to mitigate them. Hedging instruments such as forward contracts, options, swaps, and natural hedging techniques are analyzed for their effectiveness in reducing currency-related uncertainties. Additionally, the study highlights best practices in FX risk management and the role of financial institutions in supporting businesses. By evaluating real-world case studies, this research aims to provide insights into how firms can develop robust FX risk management strategies to enhance financial resilience and competitiveness.