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Dear Sir,
In foreign exchange risk…. if we use matching doesn’t it mean that there will be tie situation, no gain no loss, ?
That is the aim of all the methods of attempting to manage foreign exchange risk!
(and don’t call it a concept – its not a concept but a method that might be applicable)
So sir, if A is expecting to receive $100 from country X in few months time.
In matching method, if A want to safeguard himself from future exchange rate movements A can borrow money of same amount of $100 and then convert it to their local currency.When A is about to receive from his customer he can pay off the loan from that amount. Am I right?Is it same as Market hedging ?
Regards
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