When it comes to doing business abroad, how
are you handling your foreign exchange exposure? Hedging is a great way to protect your profit
margins and lower your costs, without potentially leaving money on the table. If you simply operate in U.S. dollars, there’s
the loss of control over the exchange and pricing of your products. You may sell your product when the exchange
is favorable but not get paid until later when the exchange has shifted and is less
than favorable. There’s also loss of market access by not
operating in the local currency. Pricing in local currency can help you compete
in foreign markets. Buyers naturally gravitate toward products
priced in their currency. Hedging allows you to participate in the global
economy while mitigating these risks and increasing your opportunities. Companies don’t hedge because they know where
the market is going, they hedge because they don’t. You can operate in local market currency at
locked in rates that secure your money, should the exchange shift. Similar to homeowners insurance, it protects
you against potential future catastrophes. In fact, not hedging is the riskiest thing
you can do. Ready to improve the foreign exchange equation
in your favor? Let’s talk. BOK Financial, long live your money.