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标题：Exchange Rate Risk Management Practices among Agricultural Firms in Kenya
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作者：M. Joel Kiguta ; Muturi Wachira ; Jimnah Waweru 等
期刊名称：Business and Economics Journal
电子版ISSN：2151-6219
出版年度：2017
卷号：8
期号：2
出版社：AstonJournals
摘要：Varying exchange rates expose firms involved in international transactions to exchange rate risk. The purposeof the study was to find out how Kenyan agricultural firms manage exchange rate risk exposure. This study used across-sectional descriptive study whose aim was to describe the exchange rate risk management practice amongKenyan agricultural firms involved in the export of principal crops, namely tea, cut flowers, and coffee. It was found thatKenyan agricultural firms were aware of the risk posed by exchange rates variability and majority had established riskmanagement function to deal with this and other risks. Risk management functions were mainly domiciled in the finance/accounting departments and at the board of directors’ level. Transaction and operating exchange rate risk exposureswere the most prevalent; hence, most firms considered the effects of exchange rate risk on sales, profitability, and cashflows as the most important. About 63% of the agricultural firms were setting budget exchange rates but mainly usedthem for corporate budgeting rather than for exchange rate risk management. About 30% of the firms were identifyingand estimating exchange rate risk exposure in advance and taking appropriate hedge position. Sensitivity analysis,goal-seeking analysis, and past trends and experiences were the main techniques used to estimate exchange rate riskexposure in advance. Nearly, all the agricultural firms were using currency substitution and natural hedging techniques,such as matching and invoicing in foreign currency to manage exchange rate risk exposure. Only a small proportionof about 7% were constantly using over the counter currency derivatives. The main challenges faced by agriculturalfirms in managing exchange rate risk were high exchange rates volatility, inability to adjust prices to compensate foradverse movements, difficulties in arranging hedge contract with banks, and difficulties in getting well-skilled financialrisk management labor.
关键词：Foreign currency; Exchange rates; Exchange rate risk;Exchange rate risk management; Derivatives