Foreign exchange hedging techniques: An empirical survey of manufacturing companies listed at IMKB

This dissertation aims at investigating the use of foreign Exchange (FX)hedging techniques by manufacturing companies in response to the changes in FX rates.Following the comprehensive analysis of the concepts of FX risk and its management,the study explored the FX risk and the relevant hedging methods in three groups:transaction, economic and translation risks. Drawing on the data obtained from a surveyon 60 manufacturing companies listed at IMKB, the study aimed at to find out howthese companies are affected from FX risk and how they protect themselves against it.The survey result show that, companies are mainly affected from economic andtransaction risks. Companies generaly use internal hedging techniques to hedge thetranscation risk. Although they don?t use external hedging techniques, they havedetailed information about them. Companies use marketing and finance strategies tohedge the economic risks.