Foreign exchange challenges that import / export businesses face
I got me thinking these days, reflecting about the 2019 year about to end putting together some perspectives about the year to come, I realised how world is "fast" nowadays. It is constantly changing and those changes affect directly business around the globe. A new tariff change or a new war threat can significantly increase the Dollar and that will affect the final price of the product if you work with import or Export.
For Business that are substantial importers, any decline in the domestic currency may result in imported products costing more and that means an increase to the final price to get back to the original price point.
The currency market is constantly shifting, and if your import and export business is making or accepting payments without watching those movements, it could be losing money with each transaction. You have to always look ahead and manage your resources to be prepared for those eventualities. Keep a good inventory when you get a special deal, keep a reserve of foreign currency when is favorable, watch closely and wait for the best time to do a international wire, Those are a few tips that may help protecting your business.
Managing currency risk is not only about making your dollar go further in the global marketplace, but also about hedging against those market fluctuations.