Online Special Lecture on Risk Management Techniques for Currency Fluctuations in Martial Arts and Trading Companies

[Asia Economy Reporter Suyeon Woo] The Korea International Trade Association (KITA) held an online special lecture on "Foreign Exchange Risk Management Techniques for Trading Companies" through its official YouTube channel on the 20th.

During the lecture, participants reviewed currency-specific exchange rate trends caused by large-scale U.S. economic stimulus packages and the distribution of the novel coronavirus disease (COVID-19) vaccines, and had the opportunity to hear experts explain foreign exchange risk management strategies.

Lee Seok-jae, a foreign exchange expert at KITA, advised, "If export and import prices are calculated simply based on the exchange rate at a specific point in time, exchange losses may occur due to sudden fluctuations in exchange rates. Therefore, when determining prices, it is necessary to consider not only operating profits and losses but also exchange rate trends and forecasts, and decide by applying an average exchange rate over a certain period."

He added, "During periods of high exchange rate volatility like recently, it is important to use technical indicators such as currency-specific moving averages and the Moving Average Convergence Divergence (MACD) to observe trends and find the appropriate timing to execute short-term hedging."

At the 'Online Special Lecture on Foreign Exchange Risk Management Techniques for Trading Companies' held online by the Korea International Trade Association on the 20th, Lee Seok-jae, a foreign exchange expert committee member of the association, is explaining recent exchange rate trends and foreign exchange risk management techniques. Photo by Korea International Trade Association

Following this, Kim Hyung-ryul, Deputy Team Leader of the Foreign Exchange Risk Management Team at the Korea Trade Insurance Corporation, stated, "Good foreign exchange risk management means fixing future exchange rates to protect a company's operating profit from exchange rate fluctuation risks," and added, "The exchange rate fluctuation insurance provided by the Korea Trade Insurance Corporation is supported by many related organizations and local governments in terms of premiums, making it a convenient and useful management tool for our small and medium-sized enterprises."

Finally, Park Cheon-il, Head of the Member Support Headquarters at KITA, emphasized, "Due to recent domestic and international uncertainties, exchange rate volatility is increasing, making active and proactive foreign exchange risk management necessary for our export and import companies," and stressed, "We will continue to support companies so that they understand the importance of foreign exchange risk management and can protect export profitability from foreign exchange risks."

This special lecture can be viewed again on KITA's official YouTube channel. For individual consultations related to foreign exchange, free expert consultations are also available through KITA's Trade Call Center's 'TradeSOS Trade Practice Consultation Service.'