Types of the exchange rate fluctuations Risks and theirs management practices: Theoretical Principles and review in the experiences of countries (in Persian)

Mehdi Zolfaghari (mahdizolfaghari1985@gmail.com), Bahram Sahabi (bsahabi56@gmail.com), Nader Mehregan (mehregannader@ghmail.com) and Alireza Sarang (alirezamanager@gmail.com)
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Mehdi Zolfaghari: university
Bahram Sahabi: university
Nader Mehregan: university
Alireza Sarang: university

The Journal of Planning and Budgeting (٠صلنامه برنامه ریزی و بودجه), 2014, vol. 19, issue 4, 3-34

Abstract: In the finance literature, the exchange rate fluctuations risk (ERFR) considered as one of the major systematically risks. Indeed uncertainty of Exchange rate fluctuations for each firm is deemed as the risk (uncertainty) that could affect on the firm's activities financial flows. So managing this risk is considered as one of the most important functions of financial managers of enterprises. According to the over exchange rate fluctuations in the past years and the damage it has arrived on many domestic enterprises, it is necessary that ERFR be identified and the strategies for its management be discussed. So the present study described and introduced the theoretical principles of ERFR and was discussed the experience of foreign companies in the face of risk and its management. The results showed that ERFR effect on firms' economic activity through the three main channels includes: conversion, transaction and economic risk. In this regard, foreign companies use the various tools especially operational and financial hedging to cover each risk. By given the diversity of the risk management tools and existent of platforms in order to implement them, the local companies can use them by identify and assess these risks.

Keywords: Risk; Exchange Rate Fluctuations; Risk Management; Financial Hedging; Operational Hedging. (search for similar items in EconPapers)
Date: 2014
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