Foreign Exchange Risk Management within Financial Institutions in Namibia.pdf

1、Foreign Exchange Risk Management is the process of assessing currency risk and then developing strategies to manage the risk.Foreign exchange risk is the risk that occurs when there is unexpected changes in exchange rate

2、s and foreign exchange exposure as the extent to which affect the value of a financial institutions assets or liabilities.The objective of the study was to investigate how the financial institutions in Namibia manage wit

3、h their foreign exchange risk and to find the impact of macroeconomic variables on exchange rate.The study used both secondary and primary data.The primary data was collected from 15 financial institutions by use of ques

4、tionnaires and a structured questionnaire has been used to collect the data for the study.The qualitative study was carded out to find the impact of macroeconomic variables on exchange rate and it was used to find out if

5、 the financial institutions in Namibia are facing foreign exchange risk and which strategies they are using to reduce risk.The study used descriptive design to analyze the data collected.It addressed what hedging methods

6、 have been used to reduce foreign exchange risk by financial institutions in Namibia.it can be concluded that the strategies used by financial institutions in Namibia to manage foreign exchange risk are forward contract,

7、 currency option, currency swap and the money market hedge and the forward contracts is used the most than other techniques.The quantitative was used to determine the impact of macroeconomic variables (macroeconomic poli

8、cy stability, Inflation, Interest Rate, GDP, and Political stability) on exchange rate.Data was analysed using Statistical Package for Social Sciences (SPSS).Linear Regression method was used to determine the relationshi

9、p between macroeconomic variables (the independent variables) on exchange rate (the dependent variable).The study recommends that there is needs for the government includes Central Bank of Namibia to control the interest

10、 rates charged by the financial sector to encourage investments and also use it as exchange policy to regulate the interest rate which is negative correlated with the exchange rate.It will encourage the performance of fi