by Natasha Lala, OANDA Solutions for Business
With China’s economy and currency in troubled times, Natasha Lala of OANDA Solutions for Business explains how corporate treasurers exposed to the yuan can best manage their business through the market turmoil.
The fear is that the weaker yuan could lead other nations to devalue – potentially triggering a global currency war. Already this month, we have seen Japan devalue its yen in the hope of boosting consumer spending. Therefore, if the yuan continues to fall further in the coming months, then other currencies are likely to fall too. All in all, it’s not looking good for investors exposed to China.
But investors aren’t the only ones worried, corporate treasurers exposed to China have equal cause for concern – as tasks including getting accurate prices and hedging foreign exchange (FX) exposures must seem like quite a tall order. In light of this, how exactly should these corporate treasurers go about dealing with the current market volatility?