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A Comparative Analysis in the Field of the Economic Exposure to Currency Risk

Lucian Belascu

Ovidius University Annals, Economic Sciences Series, 2017, vol. XVII, issue 1, 413-418

Abstract: Currency fluctuations became a daily habit of nowadays financial markets and their impact canbe felt in all companies, from the mere domestic ones to the transnational corporations withintricate businesses around the world. Our paper investigates the economic exposure to currencyrisk for a number of 20 companies from Romania and Croatia, between 2006 and 2011, on a shorttermand long-term perspective. The results picture a different image regarding these companies’exposure either to the Euro and the US dollar. We find that Romanian companies are moreexposed to unexpected changes in the value of their national currency against both the Euro andthe US dollar compared to Croatian companies, with the exposure more pregnant over the longterm. This may be explained by the exchange rate regime applicable to both currencies: a managedfloating for the Romanian currency and a more controlled rate for the Croatian currency.

Keywords: Currency risk; economic exposure; currency fluctuations (search for similar items in EconPapers)
JEL-codes: F00 G15 (search for similar items in EconPapers)
Date: 2017
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