{"id":69,"date":"2024-12-18T13:09:59","date_gmt":"2024-12-18T13:09:59","guid":{"rendered":"https:\/\/d-riskfx.com\/?p=69"},"modified":"2025-02-26T18:17:14","modified_gmt":"2025-02-26T18:17:14","slug":"crisis-and-currency-risk-asking-the-right-questions","status":"publish","type":"post","link":"https:\/\/d-riskfx.com\/en\/crise-et-risque-de-change-strategies-pour-entreprises\/","title":{"rendered":"Crisis and Exchange Risk: Asking the Right Questions"},"content":{"rendered":"

Crisis and Currency Risk: Asking the Right Questions to Build Resilience<\/strong><\/h1>\r\n\r\n\r\n\r\n

The COVID-19 pandemic and the accompanying lockdown measures have disrupted our daily lives and the way we do business in unprecedented ways<\/p>\r\n\r\n\r\n\r\n

This difficult situation leaves us with three options:<\/p>\r\n\r\n\r\n\r\n

    \r\n
  1. Do nothing and let things unfold.<\/li>\r\n\r\n\r\n\r\n
  2. React as problems arise.<\/li>\r\n\r\n\r\n\r\n
  3. Take a moment to ask the right questions, implement or strengthen crisis management, and seize opportunities.<\/li>\r\n<\/ol>\r\n\r\n\r\n\r\n

    The Importance of Crisis Management During a Pandemic<\/strong><\/h2>\r\n\r\n\r\n\r\n

    When it comes to\u00a0crisis and currency risk<\/a>, doing nothing can be extremely dangerous and jeopardize the survival of the business. Reacting impulsively can be costly and suboptimal, as decisions may be driven by emotion rather than grounded in an integrated risk management framework or the company\u2019s long-term strategy.<\/p>\r\n\r\n\r\n\r\n

    The third option offers an opportunity to step back, assess potential risks and opportunities emerging from the crisis, and create lasting value for the company.<\/p>\r\n\r\n\r\n\r\n

    Assess Risks and Seize Opportunities<\/strong><\/h3>\r\n\r\n\r\n\r\n

    For example, such an exercise might reveal an opportunity to acquire or invest in businesses that do not have the same balance sheet strength, or allow for diversification of product offerings, entry into new markets, vertical integration, or expansion into a new sector. Alternatively, it may reveal the need to exit an unprofitable business line and shed a weak-performing unit.<\/p>\r\n\r\n\r\n\r\n

    These strategic reflections should go hand in hand with a review of risk management policies \u2014 especially those related to currency risk. Risks related to supply chains, sovereign debt, trade tensions, and inflation will become increasingly important. Their impacts are rarely isolated or short-lived.<\/p>\r\n\r\n\r\n\r\n

    These risks have a direct and immediate effect on the frequency and intensity of exchange rate fluctuations.<\/p>\r\n

    \"crisis<\/p>\r\n\r\n\r\n\r\n\r\n\r\n

    Currency risk will manifest differently depending on your operational structure. Below are examples of questions and strategies tailored to your profile (exporter or importer), which can help enhance your currency risk policy and make your business model more resilient.<\/p>\r\n

    \"crisis<\/p>\r\n\r\n\r\n\r\n\r\n\r\n

      \r\n
    1. Break-Even Exchange Rates:<\/strong>\u00a0: These are the threshold rates beyond which your key clients may struggle to pay you \u2014 or similarly, where you may struggle to pay your foreign suppliers.<\/li>\r\n<\/ol>\r\n

      \"crisis<\/p>\r\n\r\n\r\n\r\n\r\n

      \r\n\r\n\r\n

      For more insights, see the following articles:\u00a0Crisis and Currency Risk: Coronavirus \u2013 What Now?\u00a0<\/a>and\u00a0Crisis and Currency Risk: U-Shaped or V-Shaped Economic Recovery?<\/a><\/p>\r\n\r\n\r\n\r\n

      For broader crisis management strategies, consult this article by BDC:\u00a0Crisis Management Strategies for Businesses.<\/a><\/p>\r\n\r\n\r\n

      \r\n\r\n\r\n

      International Markets: A World of Opportunities<\/strong><\/h2>\r\n\r\n\r\n\r\n

      Growing your business abroad can drive growth \u2014 but it also comes with risks for SMEs. Tracking the ongoing impact of exchange rates on forecasted performance is complex.<\/p>\r\n\r\n\r\n\r\n

      D-Risk FX <\/a>provides SMEs with detailed performance, risk, and stress-testing analyses \u2014 by market, by currency, and by business line \u2014 enabling a tailored hedging strategy and real-time monitoring of expected performance.<\/p>\r\n\r\n\r\n\r\n

      Gain autonomy, automate your processes, and approach foreign markets with the confidence of a clear currency risk strategy and the tracking tools to support your ambitions.<\/p>","protected":false},"excerpt":{"rendered":"

      Crise et Risque de Change : Se Poser Les Bonnes Questions pour Assurer la R\u00e9silience La pand\u00e9mie de la Covid-19 et les mesures de confinement qui l\u2019accompagnent ont secou\u00e9 notre vie quotidienne et la fa\u00e7on d\u2019\u00eatre en affaires d\u2019une mani\u00e8re sans pr\u00e9c\u00e9dent. Cette situation difficile nous met devant trois options: L\u2019importance de la Gestion de […]<\/p>\n","protected":false},"author":1,"featured_media":70,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"off","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[8],"tags":[],"class_list":["post-69","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-gestion-de-crise"],"_links":{"self":[{"href":"https:\/\/d-riskfx.com\/en\/wp-json\/wp\/v2\/posts\/69","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/d-riskfx.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/d-riskfx.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/d-riskfx.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/d-riskfx.com\/en\/wp-json\/wp\/v2\/comments?post=69"}],"version-history":[{"count":3,"href":"https:\/\/d-riskfx.com\/en\/wp-json\/wp\/v2\/posts\/69\/revisions"}],"predecessor-version":[{"id":1427,"href":"https:\/\/d-riskfx.com\/en\/wp-json\/wp\/v2\/posts\/69\/revisions\/1427"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/d-riskfx.com\/en\/wp-json\/wp\/v2\/media\/70"}],"wp:attachment":[{"href":"https:\/\/d-riskfx.com\/en\/wp-json\/wp\/v2\/media?parent=69"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/d-riskfx.com\/en\/wp-json\/wp\/v2\/categories?post=69"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/d-riskfx.com\/en\/wp-json\/wp\/v2\/tags?post=69"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}