I can’t get my head around this. What determines whether I sell my currency or whether I’m buying the foreign currency. So example is in 4 months time I need to pay $5m. Would I be selling GBP at the sell rate to effectively get dollars, or would I be buying $ at the buy rate? Is it whichever rate is the worst for me? I’m so confused
Ask the Tutor ACCA AFM
Buying or selling my currency
3y ago#1It depends which way round the exchange rate is quoted.
I suggest that you watch the first of my free lectures on foreign exchange risk management where I spend time explaining what rates to use.
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