2. External hedging techniques
Thanks to the freedom of foreign exchange, banks have developed a number of techniques to cover international trade operators against foreign exchange risk:
forward exchange contracts ;
foreign currency loans ;
currency swaps ;
currency options.
2.1 Forward exchange contracts
Interest
To hedge all fixed-term payment or receipt transactions against currency fluctuations.
A forward exchange contract is a purchase or sale of foreign currencies at a guaranteed rate on a specific date (figure
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External hedging techniques
Internal hedging techniques
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