Forex Risk Management Policy
Each business is unique with other and thus before framing or advising any risk management policy, we understand business model from top to bottom and thereafter draft a disciplinary policy to protect any adverse movement out of currency or interest rate risk. On the other hand, together with protection, we try to capture opportunities arises for better achievement of receivable or payable rates.
To prepare Risk management policy, key points like Risk Identification, Risk Evaluation, Risk Mitigation, Risk Reporting; we gather necessary information in following areas.
To interact with key management personnel / decision maker of the Company to understand risk appetite of the company
Identify when and how forex and interest rate risks are emerging and how they are co-related with other risks
Quantification of FX and interest rate risk, run sensitivity analysis incl. Worst-case Scenario analysis
Define suitable hedge ratio basis prevailing financial market and business conditions
Ascertaining suitable hedging instruments keeping regulatory aspect in consideration
Allocation of roles and responsibilities for managing and monitoring of risks