If you are a business that is exposed FX market volatility, then you need to take risk very seriously. By making substantial international payments or transferring large amounts of money between different currencies, you can open yourself up to significant FX risk and exposure.
Fortunately, there are things you can do to hedge against those risks, and to minimize the chances of this happening. At Privalgo we provide a number of different bespoke Corporate Solutions to mitigate risk and maximise value for their currency transfers. By combining market leading technology and talent we unlock new areas of opportunity for our clients.
Before we delve into the solutions Privalgo has available to mitigate FX risk, it’s worth going through some of the different potential risks that come from operating with exposure in the FX markets.
Currency Volatility Risk
Foremost, exchange rate volatility is probably the biggest risk to any business making large international payments. The biggest problem is that, there’s no way to know how the markets will move day-to-day. Even on major events like the recent US election, UK election last year or the Brexit vote, market analysts may be able to make an educated guess, but they never complete know. Shift in the market of even 0.05% can make a monumental difference to how much value you get from your transaction. Given that you have no control over the markets, it’s no surprise that businesses are concerned about this risk.
Let’s say you agree to a specific exchange rates when the market is in your favour, and you’re happy to progress. Unfortunately, on some occasions the rate can slip heavily in between you making the payment and then the transaction actually settling. In the long term, repeated instances of this could cost your business a lot of money. It can also make it trickier to budget effectively, simply because you aren’t exactly sure of your final sum until it arrives!
In the long-term, you’re also open to economic factors. If your home country goes through a period of economic decline, the home currency will probably also devalue. If you’re invested in that currency at the time and you’re planning to use it internationally, you’re then automatically financially worse off. Side note; we understand that any of these fluctuations can work in your favour, but the lack of uncertainty is what adds to the risk.
Now that you know some of the Factors causing Risk, how can Privalgo help your business with their bespoke Corporate Solutions?
FX Risk Management
With increased market volatility, an FX strategy individually tailored to your business has never been more essential. We offer powerful solutions that promise effective management of all currency exposures, backed up by expert guidance and leading technology.
- Build a strategy to shield your business from market fluctuations and give you greater control over future volatility.
- Assess and mitigate risks associated with exporting, importing, foreign cash flow or purchasing an overseas asset.
- Competitive hedging facilities ensure you stay protected without compromising your cash flow.
- Remove risk and create opportunities, benefiting from the experience of a personal account manager whose job it is to know your business
Competitive and transparent pricing ensures that your currency conversions are efficient, easy and cost-effective.
- Reduce your risk of market volatility with expert guidance from a personal account manager, a seasoned market professional with years of experience and training.
- Strategically time your trades to ensure maximum currency conversion in every transaction.
- Benefit from real time advice that saves you time and money, backed up by the industry’s leading market technology.
Payments and Collections
Our feature rich platform combines cutting edge technology and industry experience, offering secure payment solutions that are faster and less expensive.
- Simplify your international transfers; Pay suppliers, employees and business partners all over the world in 100+ currencies.
- No matter the volume, our technology and expertise ensure that all transactions are quick, accurate and cost effective.
- Collect payments in over 40 currencies to improve transaction times and reduce banking costs.
Service and expertise to assist in reporting and managing international cash flows.
- Assist in forecasting, budgeting and managing your international cash flow
- Identify currency exposures and risk which can free up time and resource.
- Simplified and intuitive reporting gives you the vital information you need with ease.
- Guidance and support in constructing an FX policy to achieve your objectives.
Minimise your risk today
Privalgo has over 100 years combined experience in the FX markets, and we’ve helped companies like yours minimize their FX risk over and over again.
If you’re planning to make a currency transaction but you want to maximise your next international currency transfer.