Top trends from the
2018 FX Risk Management
Survey Results

Strengthening FX risk management infrastructure remains a priority among FX leaders


of companies have a formal written policy


of companies use a quantitative methodology to measure risk


of companies specify a minimum acceptable credit rating for counterparties


review their policies annually


review their policies more frequently

Top FX risk management objectives

70% smooth the impact of changes in FX rates. 53% protect budgeted rates. 45% assist senior management's ability to forecast.

FX exposures firms typically hedge

Forecasted transactions: 62%.
Balance sheet items: 73%.
Net investment: 12%.
Earnings translation: 14%.

Instruments used to hedge FX risk


of companies use FX forward contracts


of companies use currency options


of companies use cross currency swaps

Roles FX budget and planning rates have in FX risk management

3 out of 4 participants

use budget rates for variance reporting only

1 in 5 firms

For roughly 1 in 5 firms, the values of budget rates relative to market rates can affect the decision to hedge and/or the choice of instrument

Challenges facing FX risk management

Accuracy and timeliness of information: public 47%.
For public firms, accuracy and timeliness of (exposure) information is the top challenge, noted by 47% of the participants.
Market Volitility and when/how to hedge risk: private 55%.
For private firms, market volatility and when/how to hedge is the greatest challenge, cited by 55% of the participants.