Rate Protection
Reporting and Review
By admin Last updated: 21st July 2011Reporting 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 |
|
| Market Situation |
|
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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