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Theoretical and Applied Economics
No. 3 / 2019 (620), Autumn

Currency risk management model

Constantin ANGHELACHE
Bucharest University of Economic Studies, Romania
“Artifex” University of Bucharest, Romania
Mădălina Gabriela ANGHEL
“Artifex” University of Bucharest, Romania
Dana Luiza GRIGORESCU
Bucharest University of Economic Studies, Romania

Abstract. The currency risk management is a very important aspect, especially in the case of companies that also carry out import-export activities. The currency risk is the one that can bring a series of elements that can be positive in terms of the results of the trading company or negative. Thus, for example, we can discuss the exchange rate on imports, which as it increases determines a price instability on the importer's market or on export, which as it decreases is favorable for the exporter. In the management of currency risk, volatility, exchange ratio, optimization of the ratio and the specific risks of the commercial bank must be taken into account. The risk management is an issue of utmost importance and it is carried out in several stages, pursuing precise objectives of control and adequacy of currency problems, so as to minimize and eliminate currency risks. This is a problem that is still stressful for Romania, in the context where it is a country that is not part of the Euro-monetary Union and then all intra and extra-EU transactions are made on the basis of the exchange ratio. And the calculation of the macroeconomic indicators of results being performed according to Eurostat requirements and in foreign currency, determines a certain evolution of the most representative indicator of results, namely the gross domestic product. The quantification of currency risk is another matter, which has been emphasized and established which are the issues that commercial banks, economic agents must comply with the regulations and norms of the national bank, the regulator on the banking market.

Keywords: currency risk, management, financial market, exchange ratio, commercial bank.

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