Turbulence in the Currency Markets-What Does It Mean for International Business?

Abstract

This article reflects on the recent increase in volatility in the foreign exchange market and discusses its implications for managers of multinational corporations. More specifically, it explores how currency volatility affects many aspects of international business including strategy, investment and finance, operations and sourcing, marketing, and risk management as well as strategies to mitigate, or even benefit from it. The article further discusses strategies managers of MNCs can employ to hedge currency volatility in the short and long run, and looks ahead at possible currency volatility trends.