FX Hedging Behavior among Thai Exporters: A Micro-level Evidence

Thethach Chuaprapaisilp, Nathapong Rujiravanich and Bovornrach Saengsith

No 81, PIER Discussion Papers from Puey Ungphakorn Institute for Economic Research

Abstract: Over the past 20 years, Thailand's FX hedging market has evolved to accommodate demands from rising trade and investment activities. Notwithstanding the growth in the use of FX derivative instruments for investment risk management by outward investment funds and non-residents, FX hedging demand from merchandise trade remains a significant part of the market. This paper utilizes a transactional database that disaggregates exporters according to their firm-level characteristics in order to explain their hedging behavior over periods of exchange rate fluctuation. FX hedging by exporters is found to be sensitive to the movement in exchange rate and past hedging experience. These sensitivities give rise to periods of panic or complacency. The effects also vary across exporters with different sizes.

Keywords: Currency Hedging; Hedging Market; Hedging Behavior (search for similar items in EconPapers)
JEL-codes: D22 F31 G15 (search for similar items in EconPapers)
Pages: 20 pages
Date: 2018-02
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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