Abhishek Sachdev, CEO of Vedanta Hedging speaks with Euromoney about the continued volatility in FX markets and the effects it is having on companies for FX hedging.
The trend is likely to continue throughout 2023 with increased volatility and lower excess central bank reserves leading to tighter liquidity conditions. Abhishek refers to the example of Vedanta’s client that is a private equity-owned, UK, mid-market engineering company in medical technology that would in the past have sold USD once a year for the year, but is now doing this a few months at a time to avoid getting stung by the higher cost of forwards beyond the 12-month mark.
They have bought basic option structures before, but at present they are only looking at the most vanilla of strategies – spot and forward – due to the volatility cost, even though they are executing with a global clearing bank.
Please see below for the full article.FX risk management will remain a challenge in 2023 _ Euromoney