Currency volatility has increased significantly in recent years. According to the latest currency report by Kyriba, the 1200 companies which it surveyed experienced cumulative currency impacts of circa $170 billion last year, and more than $131 billion of this was negative.
Abhishek Sachdev, CEO of Vedanta Hedging, speaks with Euromoney about how many companies are hoping for the best on the spot market instead of hedging. He adds that he has seen some chief financial officers (CFOs) go the other way and be more tempted to enter into unnecessarily complex structured products such as outperformance trades, which have the veneer of looking more attractive when there is such high volatility.
Some FX brokers are taking this opportunity to offer longer-dated FX products to provide more attractive pricing, but this can be a double edged-
sword for corporates
Please see below for the full Euromoney article.FX volatility tests corporate treasury resilience _ Euromoney with VH