Forex and Interest Rate Risk Management

This report gives an insight into the operations and working of Forex and Treasury Division of a global conglomerate focusing on managing foreign currency and interest rate risks. The strategies used by the treasury divisions of a global conglomerate have been highlighted by studying the activities carried out at such an organization.The report includes how forex exposures are managed to maximize the receivables and minimize the interest costs and discusses the use of financial instruments such as Forwards, Options and Swaps to hedge against adverse movements of exchange rates.Based on the economic slowdown triggered by the sub-prime crisis and crude oil shocks, the report discusses how a conglomerate can get drastically affected due to the micro economic and macro economic factors influencing international business. Finally it touches upon the proactive decisions taken by the management to achieve the goals add value to the organization.