Top trends from the
2018 FX Risk Management
Survey Results

Strengthening FX risk management infrastructure remains a priority among FX leaders

66%

of companies have a formal written policy

23%

of companies use a quantitative methodology to measure risk

67%

of companies specify a minimum acceptable credit rating for counterparties

75%

review their policies annually

10%

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

93%

of companies use FX forward contracts

20%

of companies use currency options

13%

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.