Martin Berkeley & Abhishek Sachdev of Vedanta Hedging were interviewed (by the International Business Times) on Currency Hedging uncertainty for importers and exporters regarding the Scottish Independence referendum.
Vedanta Hedging is authorised by the FCA to advise corporates on how to hedge currency risk.
Abhishek Sachdev stated “The whole point of hedging FX risk is to try and reduce uncertainty in currency movements and unfortunately what we’re seeing is more uncertainty that these companies have ever faced before,” said Abhishek Sachdev, managing director at Vedanta Hedging.
“So they’re having real concerns with regard to what currency they will be importing or exporting with, how long they should hedge their risk, and normally these are being taken six, to 12, to 18 months ahead.
“However, it is very difficult for these corporates to make those decisions now because they don’t know what the decision is going to be in that time frame, so unfortunately it means that many of these corporates won’t be hedging their risk as well as they should be.”
Martin Berkeley stated, “There has been a lot of negative sentiment in the market, there was a sell-off of Sterling, bond yields are changing, but also at the smaller end of the market, SMEs are feeling the repercussions already from people not telling them whether they have won new business or contracts or not,” said Martin Berkeley, consultant at Vedanta Hedging.
“So there are market implications but also real business impact implications too.”