Currency risk
Spanish companies that are committed to approaching foreign markets must design a strategy that allows them to successfully internationalize and this implies facing the risks that may arise, one of which is the evolution of currencies.
To analyze this variable in depth the Banco Santander has celebrated in the Madrid Chamber of Commerce the day “Exchange rate risk management and its impact on the income statement”.
“The first thing that companies have to be clear about are the amounts or billings they have to certain economies,” he explained during the meeting. José María Alarcón Escribano, head of Madrid Territorial International Business at Banco Santander.
Likewise, he stressed that “if we sell in american dollar, if we sell in pound sterling, or if we sell in Mexican peso we have to take into account the fluctuation of those foreign exchange against our local currency which is the euro” in order to determine the interest of “covering the currency both in cash and in term”.
During the analysis, the importance of taking into account that currency fluctuation is affected by different variables, including situations such as the trade war, the Brexit or protectionism, trends that currently characterize the global environment. Specialists call on companies to be proactive and that is precisely one of the objectives of the Banco Santander by providing the necessary support to analyze and define the most appropriate coverage strategies for each operation.
"Banco Santander What it offers to our clients is that monitoring of the evolution of the Forex market and above all, that target price that they have both from the perspective of purchase and sale, having it in our daily life to be able to advise them and offer them, not only the exchange rate risk coverage that best suits their possibilities. , but also the best purchase or sale price” he pointed out. Alarcón.
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