Currency Derivatives and Emerging Market Currencies: Strategies, Perspectives, and Trends

Anthony L. Loviscek
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Anthony L. Loviscek: Department of Finance and Legal Studies, Stillman School of Business, Seton Hall University, South Orange, NJ 07079, USA

Chapter 11 in Advances in International Investments:Traditional and Alternative Approaches, 2008, pp 259-288 from World Scientific Publishing Co. Pte. Ltd.

Abstract: AbstractEmerging markets have delivered significant double-digit returns to foreign investors for more than a decade, clearly outpacing the returns from developed markets. The gains, however, have come with a price: high risk. In particular, political instability and erratic macroeconomic policies have caused wide swings in local currencies. Although these swings have mitigated in recent years, it behooves foreign investors to use currency derivatives to limit their impact. This article provides an overview of currency derivatives and strategies to hedge currency risk in emerging markets, including developments in currency derivatives in selected emerging economies in Asia, Africa, Europe, and Latin America.

Keywords: Global Investment; Traditional and Alternative Investments; Equity Investments; Fixed Income Investments; Portfolio Management; Derivatives; Risk Management (search for similar items in EconPapers)
JEL-codes: F3 G21 (search for similar items in EconPapers)
Date: 2008
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