Webinar Replay
Get Started with Navigating the World of Foreign Exchange Management
In today’s fast-paced global economy, foreign exchange (forex) management has become a vital skill for businesses engaged in international trade.
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Nicky Strydom
- 3 minutes read
With the UK’s daily forex turnover reaching an extraordinary $3,117 billion (Bank of England, 2023), businesses face increasing exposure to currency volatility, complex regulations, and operational challenges.
This webinar, led by Sharon Constançon, CEO of Valufin, delves into the essential strategies for navigating these risks. Sharon introduces the VALUFIN framework, a structured approach to forex management while discussing actionable ways to optimise profitability, enhance decision-making, and build resilience in an unpredictable global market.
Discover the practical tools your business needs to succeed in managing forex risks effectively.
Key Takeaways
In today’s high-stakes global trade environment, effective forex management is essential for safeguarding financial stability and achieving long-term growth. Key insights from the webinar include:
- Understanding Unique Business Needs: Tailored solutions are critical for addressing specific business risks, credit terms, and liquidity requirements.
- Building a Strategic Framework: The VALUFIN framework emphasises the importance of strategy, assessment, learning, and adaptability in foreign exchange management.
- Managing Market Volatility: Proactive risk strategies and decision-making processes reduce the impact of sudden currency fluctuations on profit margins.
- Optimising Cash Flow: By integrating sound forex strategies, businesses can maintain consistent cash flow and improve their financial resilience.
- Enhancing Decision-Making: Structured, informed decision-making processes ensure businesses avoid reactive choices during market turbulence.
These insights provide a roadmap for businesses to confidently navigate the complexities of forex management and seize opportunities in international trade.
Overview of Foreign Exchange Management
- The complexity of foreign exchange impacts profit and loss significantly in importing and exporting businesses.
- Relying solely on banks for foreign exchange management is limiting and may not address unique business needs.
- Strategic foreign exchange management is crucial for mitigating risks and maximising profitability.
Importance of Customised Solutions
- Each company’s foreign exchange needs are unique, requiring tailored strategies to address specific risks.
- The lack of formal training in foreign exchange management highlights the value of consulting experts.
- Quick decision-making is critical due to the volatility of foreign exchange markets.
Framework for Foreign Exchange Management
The VALUFIN Framework provides structure to manage the complexity of foreign exchange.
- Value: Build strong strategies and policies.
- Assess: Evaluate current operations and risks.
- Learn: Gain knowledge of market impacts and tools.
- Understand: Deepen comprehension of risks and costs.
- Find: Identify solutions tailored to business needs.
- Internalise: Integrate practices into everyday decision-making.
- New: Stay updated with market trends and opportunities.
Assessing Business Needs
- Assessing the business’s unique risks includes factors like importing, exporting, lead cycles, credit terms, and liquidity.
- Market volatility and the need for quick, informed decisions significantly impact foreign exchange strategies.
- Tailored solutions ensure alignment with the company’s specific operational and financial needs.
Learning and Understanding Foreign Exchange Impact
- Understand the true cost or income of foreign exchange transactions and their impact on profit and loss.
- Learn how different market conditions affect hedging options and foreign exchange strategies.
- Grasp the complexity of foreign exchange accounting and its role in accurate financial reporting.
Implementing a Foreign Exchange Strategy
- A sound foreign exchange strategy balances risk and opportunity to achieve business goals.
- Effective decision-making relies on accurate information and a well-planned approach to managing foreign exchange risks.
- Strategies should be proactive, not reactive, to minimise losses and maximise opportunities.
Internal Decision-Making Processes
- Effective internal processes ensure that foreign exchange decisions are logical, timely, and aligned with business goals.
- Delegating responsibilities and defining clear roles helps streamline strategic decision-making.
- Planned strategies reduce the risk of panic-driven decisions during periods of market volatility.
Case Study: Improving Foreign Exchange Efficiency
- A well-planned strategy using spot rates and hedging improved a customer’s cost efficiency by up to 5.95% annually.
- The integration of tailored strategies across multiple departments streamlined processes and reduced unnecessary risks.
- Incremental improvements in foreign exchange management significantly impact the bottom line.
Q&A Session Insights
- Geopolitical and Sovereign Risks: Managing foreign exchange in countries with low liquidity or regulatory restrictions requires creative solutions and expert guidance.
- Digital Platforms: The suitability of digital providers depends on the business’s specific needs, industry, and operational scale.
Final Remarks and Closing
- Efficient foreign exchange management is essential for ensuring business sustainability and long-term success.
- The VALUFIN Framework equips businesses with the tools needed to navigate complex forex environments confidently.
Host
Sharon Constançon is a trailblazer in the world of forex treasury management, bringing over 40 years of expertise to businesses navigating complex global markets. As South Africa’s first female Chief Forex Dealer, Sharon led innovative solutions and laid the foundation for what has become a vibrant Forex services market in the region. In 2009, she founded Valufin, a global leader in tailored treasury services, empowering companies to manage forex risks confidently and optimise their financial outcomes.
Throughout her career, Sharon has worked with over 200 international companies, helping them address the pitfalls in forex processes, implement effective accounting systems, manage transaction risks, and develop insightful management information. Her strategic approach ensures businesses are equipped to handle currency volatility and achieve financial stability.
A forward-thinker with a deep understanding of technology, Sharon has developed two SaaS platforms: FRM, the cornerstone of Valufin’s treasury services, and Hawk, which delivers advanced intelligent assessments. These innovations exemplify her commitment to driving efficiency and effectiveness in forex treasury management.
Sharon’s career began in the mining sector with a company now part of the Anglo-American Group before transitioning to forex management roles at Blue Circle and Société Générale in Johannesburg. In 1988, she founded Constançon Currencies, a pioneering forex services firm, before shifting her focus to governance and launching businesses in both South Africa and the UK.
In addition to her work in forex, Sharon is a respected voice in governance and boardroom dynamics. She lectures, conducts training, and speaks at global conferences, sharing her expertise on effective board practices and strategic risk management. Sharon’s ability to bridge the worlds of forex and governance makes her a sought-after leader, mentor, and educator in her field.
Discover how Valufin’s expertise can support your business
Contact your forex treasury advisor today.
