Emerging markets are a growth sweet spot for many corporates. But concerns around economic stagnation and trade relations have weighed heavily on emerging market currencies as the US and China continue to butt heads over tariffs.
In this context it might be expected that corporates operating in emerging markets would have a distinct market hedging policy for currencies outside the G10 group of nations. Yet although more than 80% of respondents to Citi’s recent global corporate benchmarking survey reported having exposures to emerging market currencies, a similar percentage admitted that they didn’t differentiate between emerging market and developed market hedging practices.
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Jaya Dutt, Citi |
Jaya Dutt, global head of risk management solutions for corporate FX at Citi, says that while most of the companies surveyed have an enterprise resource planning (ERP) or treasury management system (TMS) in place, integration between these systems is limited and risk management processes remain largely manual.
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