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Reporting and Review

By admin  Last updated: 21st July 2011

Reporting and Review Foreign Exchange

There needs to be continuous monitoring whether the Exposures are headed where they are intended to reach. As such, the Exposure Management activities need to be reported and reviewed.

Managing Foreign Exchange Risk is an essential part of business dealing in this area and should be viewed with objectivity and if monitored, Installing Hedging, Reporting and Review systems that work takes time and effort. Although there will be a Learning Curve to be overcome when setting Benchmarks all that has been stated above cannot start happening straightway but will in turn work with the amount of effort you exert.

Foreign Exchange Reporting

 

The Exposure Manager will prepare the following Reports on a regular basis:

Report Name What is Shows Periodicity
MTM Report The Mark-to-Market Profit/Loss status on Open Forward Contracts Daily, closing
Exposure Report The All-in-all exchange/interest rate achieved on each Exposure, and profitability vis-à-vis the Benchmark Fortnightly
VAR Report Expected changes in overall Exposure due to forecasts exchange/interest rate movements Monthly

 

Foreign Exchange Review

A monthly Review meeting will consider the following:

 

 

Issue On the basis of Points to be reviewed
Exposure Performance Exposure Report
  • Is the Benchmark being met/bettered?
  • What are the chances of the Benchmark being violated on the wrong side?
  • Reasons for the Benchmark being violated on the wrong side
Market Situation
  • Reviews of market developments
  • Forecasts of market movements
Is the Big Trend still in place? Or has it changed
Benchmarking The above two Does the Benchmark need to be changed
Hedging Strategy MTM and Exposure Reports Is the strategy working well? Or does it need to be fine-tuned/overhauled?
Operational Issues Exposure Manager’s Experiences Operational problems to be solved.
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