Managing foreign exchange risk: Strategies and techniques in international financial management
DOI:
https://doi.org/10.5377/reice.v12i23.18279Keywords:
Foreign Exchange Risk, International Financial Management, SEM analysisAbstract
The present study examines the beliefs and practices around foreign currency risk management within a heterogeneous sample of participants. In the contemporary context of a highly interconnected global economy, the effective management of foreign exchange risk has become of utmost importance for enterprises in order to protect their financial stability and enhance their competitiveness. Using the descriptive research design study addressed the issues with a diverse set of demographic factors, such as gender, age, and educational backgrounds, providing insights into the diverse viewpoints present within the examined companies. Providing a thorough description and study of the characteristics linked to a certain event is the main goal of descriptive research; it does this without changing any factors. The data analysis was carried out using SPSS for descriptive statistics, dispersion techniques, ANOVA and Structural Equation Model Analysis using IBM AMOS to test the hypotheses. The results of the study unveil a multifaceted panorama of perceptions. The respondents exhibit predominantly unfavorable perspectives with regards to the foreign exchange risk management techniques implemented by their respective organizations. The user vehemently opposes the active implementation of hedging methods, the proficient utilization of financial instruments, and the regular evaluation of hedging plans. Nevertheless, they maintain a neutral stance when evaluating the influence of these tactics on financial outcomes. In summary, this research highlights the importance of continuous endeavors aimed at improving foreign exchange risk management within firms. Organizations may effectively traverse the intricate global financial landscape and limit the influence of currency changes on their financial performance by proactively addressing recognized difficulties and fostering a culture of continuous improvement.
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