Currency Risk Management - A case study of two Swedish mid-corps
Foreign exchange risk is inevitable for companies that are involved in international business (in foreign exchange). Many Swedish companies are dependent on international trade and it is, therefore, important that they manage the foreign exchange risk in an appropriate way. Further, there are a variety of techniques available in order to manage the foreign exchange risk.
The purpose of this dissertation is to describe how mid-corps can manage its foreign exchange exposure. Further, we will evaluate and describe the current foreign exchange activities in two Swedish mid-corps and suggest how their usage of the different methods and instruments can be improved. In order to find answers to our research questions we conducted interviews with two mid-corps. The results of the case study showed that the mid-corps perceive the foreign exchange risk as a major risk in international business, although they do not deal with it as much as they ought to, due to lack of time and knowledge. Therefore, the need should be provided externally from the banks for natural reasons. The companies have a need for currency risk management that must be satisfied. The banks have knowledge and products to satisfy the need, at the same time as it is in their own interest to sell the products and have a financially stable customer base. Hence, a win-win situation would be possible to achieve.
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