US Holds Seminar on Martial Arts and Fantasy Risk Management Techniques at 'Giant Step'

Increased Exchange Rate Volatility During Interest Rate Hikes... Need for Currency Risk Hedge Strategies

[Image source=Yonhap News]

[Asia Economy Reporter Park Sun-mi] As the U.S. Federal Reserve took a giant step (raising interest rates by 0.75 percentage points at once) for the first time in 28 years, the Korea International Trade Association held a 'Trade Company Foreign Exchange Risk Management Techniques Seminar.'

The seminar held on the 16th was organized to provide member companies with the necessary information to manage foreign exchange risk amid increasing volatility in the KRW-USD exchange rate. Due to this year's U.S. interest rate hikes, the domestic KRW-USD exchange rate has exceeded 1,290 won, the highest level in 2 years and 3 months since the spread of COVID-19, increasing volatility.

Yoon Chan-ho, team leader at Samsung Futures, stated, "The KRW-USD exchange rate is likely to remain in the high 1,200 won range for the time being," but emphasized, "Since the exchange rate no longer shows consistent trends, it is essential to have foreign exchange risk hedging strategies in case the rate moves in an unexpected direction." Following this, Cho Song-hee, deputy director at Korea Trade Insurance Corporation, advised, "Although export companies have recently been subscribing to foreign exchange fluctuation insurance more frequently, there are still many cases where they do not apply for insurance. Foreign exchange fluctuation insurance should be subscribed to not for maximizing profits but for stable revenue management."

Kim Byung-yu, head of the Member Services Division at the Korea International Trade Association, said, "With increasing exchange rate volatility, there is concern about damage to small and medium-sized enterprises lacking foreign exchange risk response capabilities," and added, "We hope companies actively respond to sudden foreign exchange risks by using the digital trade consultation platform 'TradePro' or the 'On-site Trade Advisory Service' provided by the Trade Association."

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