Seminar on Foreign Exchange Risk Management at Coimbatore
 |
FIEO’s Southern Region office organised a Seminar on "Foreign Exchange Risk Management" on 30th January at Coimbatore. The seminar was organized jointly with Indian Chamber of Commerce and Industry, Coimbatore and HSBC Bank. Around 120 exporters participated in the seminar. Outlining the objective of the seminar, FIEO Vice President Mr. A. Sakthivel said that managing foreign currency was becoming extremely crucial for the exporters in the wake of appreciating rupee. He said given the high volatility of Indian rupee, exporters were hesitant to enter into long term contracts or negotiate new contracts. The recent packages announced by the Government to provide relief to exporters against stronger rupee were insufficient to offset their losses, added Mr. Sakthivel. |
|
Mr. A. Sakthivel, Vice President, FIEO addressing the gathering. On the dais from right, are Indian Chamber of Commerce & Industry, Coiambatore, Hony. Secy. Mr. R R Balasundaram, & President Mr. D Balasundaram and Mr. Arul Mozhi. |
Mr. Sakthivel says that price movements for currencies in market economies are influenced by a numbers of factors such as changing supply-demand relationships; trade, fiscal, monetary, exchange control programs and policies of governments; changes in national and international interest rates and inflation; currency devaluation; sentiment of the market etc., which are beyond control for any advisor. He suggests that banks should sensitize their operating units towards integrated approach to risk management tools.
According to Mr. Sakthivel, some foreign exchange risk management issues confronting exporters in their day-to-day foreign exchange transactions are:
-
unexpected corrections in currency exchange rates,
-
wild variations in foreign exchange rates,
-
volatile markets offering profit opportunities,
-
lost payments,
-
delayed confirmation of payments and receivables, and
-
divergence between bank drafts received and the contract price.
President of Indian Chamber of Commerce and Industry, Mr. D. Balasundaram in his address warned that the current rupee appreciation was affecting textile workers in Coimbatore, Tirupur and nearby areas. He further warned that if immediate corrective measures were not taken then it might lead to fall in demand for the yarn produced in the state and that would entail further unemployment.
Calling the sops offered by the Government to offset the losses borne by exporters as meager compared to 14% decline in the net realization in export proceeds, he appealed for a concerted action by the Reserve Bank of India, Govt. of India as well as State Government.
|
Mr. Arul Mozhi, Relationship Manager, Trade Sales, HSBC along with his colleague Mr. Vinod Kumar made a presentation on Export Finance and explained in detail various trade advisory services offered by the bank for the exporters like 24 hour processing facilities, follow up for payment, instant information services etc. They also explained about Export Factoring, which, they said, could help exporters manage their working capital cycle better. Mr. Vikram Dhani, Manager, Treasury Department, HSBC, Mumbai made a presentation on how to use various risk management tools. |
 |
| A view of the participants |
