Glossaire

FX policy is the process by which companies capture the growth opportunities that result from buying and selling in multiple currencies. A firm’s FX policy is therefore of strategic value; it comprises the entire FX workflow: the pre-trade phase (including the firm’s pricing policy), the trade phase (hedging) and the post-trade phase (cash management and accounting). By pricing and selling in the client’s currency, firms ‘speak the language’ of their customers, allowing commercial teams to add promising new markets to the portfolio. Buying in suppliers’ currency allows companies to widen the range of potential suppliers and to bypass supplier markups, thus leading to higher profit margins. An effective FX policy presupposes effective FX hedging. Depending on a company’s specific parameters, many types of hedging programs can be designed to protect a company from FX risk. The implementation and management of these FX hedging programs may be quite burdensome for treasury teams that rely on manual execution and spreadsheets. However, Currency Management Automation solutions allows firms to run them smoothly, on a fully automated basis.