Chitkara Open Access Journals - Blog

Forex Risk Management by SMEs and Unlisted Non-financial Firms: A Literature Survey


  • Aman Chugh, Market Connected Advisor LLP and Research Scholar, Chitkara University, Punjab
  • Renuka Sharma and Kiran Mehta, Chitkara Business School, Chitkara University, Punjab


Forex risk, Currency derivatives, Hedging Instruments, SMEs


In the recent globalised financial markets, financial markets are more integrated which leads to more foreign exchange risk for firms. In such scenario currency derivatives are top most operational hedging strategy to manage foreign exchange risk. This scenario is different in developed and emerging markets as turnover of derivatives is growing swiftly in emerging markets and uses of currency derivatives is common but lower in comparison to the interest rate derivatives. In emerging markets (Hong Kong, Singapore and Brazil) use of currency derivatives is fifty per cent of total derivative traded follow by equity derivatives and interest rate derivatives (Mihaljek and Packer, 2010)…



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