Be it a local company or multinational corporation, managing foreign exchange is important in today's globalised economy. The appreciation or depreciation of foreign currency affects a firm's profitability and liquidity. Hence, an appreciation of how international trade, business, economic and political developments could impact the exchange rate movement is critical in business strategic planning and control. Managers and executives in all functions - not just finance - should understand how to interpret the exchange rate, how the foreign exchange market works, and what effective tools and techniques in managing foreign currencies are available.
Using practical exercises, the Effective Foreign Currency Management workshop is designed to demonstrate the interpretation of foreign exchange rate, and determine the extent of currency appreciation and depreciation. Methods and techniques of managing foreign currency in business operations will also be discussed.
This introductory workshop is ideal for managers and executives who are not involved in foreign currency dealings and management, but who need to know how foreign exchange works, and apply currency-related techniques when making business decisions.
Introduction to Foreign Exchange
- Why firms go international
- Types of overseas operations
- Differences between domestic & multinational financial management
- Current developments impacting foreign currencies
Currency Risk Management
- Financial strategies to guard against foreign currency depreciation
- Impacts of changes in foreign exchange rates
- How to forecast foreign exchange rates
Interpreting Foreign Exchange Rate
- Spot rate
- Forward exchange rate
- Direct quote vs indirect quote
- Differentiation between foreign currency appreciation and depreciation
- Bid & ask quotes
Arbitrage & Hedging
- Two-currency arbitrage
- Three-currency arbitrage
- Interest rate parity condition & covered interest arbitrage
- Purchasing power parity condition