KITA Holds Online Special Lecture on "Foreign Exchange Response Strategies for Trading Companies"

[Asia Economy, reporter Hwang Yoonju] The Korea International Trade Association (KITA), in collaboration with Samsung Futures, held an online special lecture on "Foreign Exchange Response Strategies for Trading Companies" on December 2.

This special lecture was organized to strengthen the foreign exchange risk management capabilities of domestic trading companies, as exchange rate volatility has recently increased due to the ongoing COVID-19 pandemic and the rise of protectionism in various countries.

Jeon Seungji, Senior Research Fellow at Samsung Futures, stated in the presentation, "Next year, the won-dollar exchange rate is expected to show a 'low in the first half, high in the second half' trend. In the first half, the won-dollar exchange rate is likely to fall (indicating a stronger won) due to fiscal spending by major countries, expectations for a COVID-19 vaccine, and the normalization of Korean exports. However, in the second half, expectations for U.S. infrastructure investment and rising interest rates are expected to drive a rebound in the dollar. As a result, the relative strength of the won will be diluted, and the decline in the exchange rate will narrow."

Lee Seokjae, KITA’s foreign exchange consultant, commented, "With the recent continued strength of the won, it has become difficult for export companies to determine the optimal timing for hedging. The best approach is to plot the moving average line for about 20 days for each major currency, and if the exchange rate rises to a level close to the average, execute a short-term hedge within one month."

Park Cheonil, Head of KITA's Member Support Division, said, "Since exchange rates are directly linked to the profit structure of our export companies, it is necessary to always manage foreign exchange risk proactively, especially during periods of declining exchange rates like now. Export and import companies should establish various profit and loss scenarios and continuously monitor exchange rate trends to respond to changes."

The special lecture is available for replay on KITA's YouTube channel. Companies that require individual consultation on foreign exchange can receive free one-on-one counseling with an expert through KITA's 'TradeSOS Trade Consultation Service.'

This content was produced with the assistance of AI translation services.