Corporate treasurers face multiple challenges as their organisations expand into new markets and navigate unfamiliar business environments. Understanding how to quantify risk and protect their business against currency fluctuations has become a key skill set for treasurers.
Managing foreign exchange (FX) risk has become more critical for international treasury functions as currency volatility rises amid growing geopolitical and global macroeconomic uncertainty. In HSBC's Risk Management Survey of about 200 chief financial officers (CFOs) and 300 treasurers in large businesses, nearly 60 per cent of the CFOs identified FX risk management as one of the two risk areas that took up the largest proportion of their time. Among treasurers, 72 per cent said FX risk management was one of the most important aspects of their job.
Treasurers are particularly aware of their transactional FX exposure. More than one in four treasury professionals surveyed by HSBC at its forums across Australia identified managing transactional FX as the most important way of optimising risk management.