Banks offer range of options for managing currency movements

IMPORTERS AND exporters should not be speculating in currency movements – they are not currency traders and when they overstep the line this is usually where they suffer losses, says FNB International Banking CEO Steven Matthews. “Exporters want to ensure that they safeguard their rand earnings and importers want to be certain that the rand cost of the goods they are buying does not rise. “Importers and exporters are in the business of manufacturing goods or sourcing goods from around the world and selling them to their customers,” he says. “This is where their expertise lies and they do not want to speculate in currency movements. Banks that are authorised dealers in foreign exchange are able to provide these products – and there is a range of options on the market. “There are uncomplicated products that work very well, such as forward exchange contracts. “However, for larger clients there are more exotic and sophisticated products that incorporate derivatives,” Matthews says.