AFP’s new guide FX Risk Management in a New Era of Volatility aims to support treasury practitioners in developing a strategy and policy to manage foreign exchange risk. It is targeted primarily at practitioners in US-based corporations.
Written by WWCP’s team of financial researchers, journalists and authors, the first part of the guide examines the factors that affect a treasury practitioner’s ability to identify and manage foreign exchange risk:
- volatility in foreign exchange markets
- development of the offshore Chinese renminbi market
- impact of regulation on the foreign exchange market.
The second part, examines the key stages required in setting and implementing a foreign exchange risk management policy:
- key decisions that treasurers need to take both on a strategic and tactical level. It recognizes that each company faces its own particular challenges and has its appetite for risk. As a result, the approach taken is to ask questions that help the reader identify an appropriate policy for their own organizations, rather than dictate a narrow approach
- how to recognize exposures, how to determine whether or not to hedge them
- how best to report a policy’s effectiveness to senior management and the board.
CTMfile take: Effective FX risk management is essential for saving your company money and your job. This guide by the WWCP team could ensure that your corporate treasury department is getting the basics right.