Treasury Outlook

Be Flexible in the Face of Challenges

Pressure on cash management and working capital looks set to be more intense than ever in 2024, forcing treasurers to be resourceful and innovative to protect capital and help navigate their companies through the year ahead.

Entering 2024, the impact of higher interest rates in markets worldwide has been a critical focus for corporate treasurers. Even though the Federal Open Markets Committee in the US was far more active and aggressive with rate hikes in 2022 compared to 2023, the Federal Funds rate was still a whole percentage point higher entering this year than it was 12 months previously. In January 2023, the Bank of England’s Bank Rate stood at 3.5% but entered 2024 at 5.25%. The European Central Bank’s benchmark rate on the deposit facility stood at 2% a year ago, but has doubled to 4% in the 12 months that followed.

This higher interest rate environment has brought cash management and the treasury function into sharp focus, particularly for multinational corporates.

Jim Scurlock, Senior Director, Assistant Treasurer, Expedia Group, comments: “Expedia has operating subsidiaries all around the world and, to maximise shareholder value, it’s important that we have strong cash management practices to limit idle balances and invest any excess liquidity to maximise our interest income.”

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