(See also Business Solutions: Finance: Foreign Exchange.)

FX Risk Management Strategies

If you have foreign exchange (FX) denominated contracts – either issuing them or having to pay them – you have exposure to changes in the exchange rate. (In any case, converting sterling into or out of foreign exchange represents additional costs to your business, one way or another.)

You can manage your foreign exchange risk with one or more of the following:

  • Rate Stability with a Forward Contract

  • Hedging:

If your costs are flexible, there is the option to purchase a percentage of your foreign exchange exposure using a forward contract and buy the rest using spot transactions as and when you need to do so. This is known as hedging. Many businesses purchase only a certain percentage of their foreign exchange exposure (30-60%). So when the need to exchange currency occurs they can either draw down from their forward contract, if the markets have moved against them, or opt for a spot transaction, if the markets have moved in their favour, to benefit from the improved rate.

  • Layering forward contracts:

This simply means that you buy your forward contracts at different times. So you start off by buying a forward to cover your basics. If the market moves in your favour and forwards for your currency pairs become cheaper, you buy another forward contract. That way you always eliminate a percentage of your currency risk while also taking advantage of different pricing levels due to market movements.

To deal with both the risks and costs of foreign exchange, why not consider opening an account with Ebury?

Ebury offers two headline FX services:

  1. Foreign Currency Accounts
  2. Foreign Exchange Risk Management

Ebury FX Services - Everything you need in one place

Ebury gets to know your business, trade flows and risk appetite to find cost-effective FX and risk management solutions:

  • Convert money across currencies. - transactions in more than 130 currencies (including "exotics").
  • Manage your FX risk (Large 0% deposit credit lines - For forward contracts, banks and brokers typically take a deposit to counteract the large amount of counterparty risk they are exposed to. Due to Ebury's strong balance sheet, Eburye can offer you a reduced or 0% deposit facility).
  • Efficient Distribution - Ebury is dedicated to ensuring that your funds are transferred in the most efficient way possible.
  • Spot transactions, forward contracts, NDFs, market orders and hedging for multiple currency exposures are all covered.
  • Finance your payables and receivables.
  • See your currency balances and statements.
  • View your account details for global collections (24/7 Account Access).

It takes just 3 steps to sign up with Ebury (no step costs and no commitments):


  1. Registration.
  2. Compliance Check.
  3. "Meet" your specialist - start a dialogue with your dedicated finance specialist so Ebury can understand your needs.

Ready to go.

Working with foreign currencies carries an inherent risk that could have a detrimental impact on your bottom line. With Ebury, you are assigned a dedicated currency specialist who will guide you through the process of managing this risk.

To review examples of where Ebury has satisfied customer requirements see: