KASE Academy held a seminar on currency risk management and hedging instruments for businesses

The speaker was Kristina Soboleva, an independent financial strategist, derivatives and currency risk management expert, and CFA Charterholder with over 17 years of experience in financial markets, including investment banking, corporate treasury and the derivatives market.

The seminar addressed key sources of currency risk for businesses - import purchases, export revenue, currency liabilities, contract-to-payment timeframes, as well as the impact of exchange rate volatility on margins, costs and cash flow of companies. Participants discussed approaches to assessing the currency risk in monetary terms and practical methods for managing an open currency position.

Particular attention was paid to hedging instruments, including natural hedge, currency clauses, forwards, swaps, currency futures and options. The speaker also presented practical cases from Kazakhstan's companies from various industries, demonstrating how exchange rate fluctuations can significantly impact the economics of a transaction and a business's financial performance.

"One of the most important principles is that risk begins where volatility exceeds margin. If a company's margin is 15%, and the currency risk under a contract reaches 20-30%, then the actual profit remains exposed to market influence. Therefore, currency risk must be converted into money - understanding how much a company can lose or gain with a 5%, 10% or 20% exchange rate change. When risk is expressed in monetary terms, it can be managed systemically and used to make managerial decisions", noted Kristina Soboleva.

Following the seminar, the participants asked the speaker their questions and discussed the practical aspects of using hedging instruments in company operations.