Factors affecting foreign exchange market and reducing the risk of these factors in the SME sector

Ács Lili (2023) Factors affecting foreign exchange market and reducing the risk of these factors in the SME sector. Külkereskedelmi Kar.

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Absztrakt (kivonat)

During the thesis, I analyzed the factors influencing the forex market, the best tools for reducing currency exposure, and using the observation method, with the help of secondary and primary research, I got an answer to the vision and attitude of company managers and executives towards forward transactions. Furthermore, with the method of observation, the circle emerged as to why the use of futures contracts, other financial instruments or perhaps the services of Fintech companies is not widespread enough among SMEs. Based on the data provided by the literature, I set up an interview and an observational research in order to be able to interpret my research questions on a deep level and to see the emerging problems and cause-and-effect relationships up close. The first set of questions was based on the factors influencing the foreign exchange markets. The factors mentioned in the literature and in the research were: economic news, events, wars, inflation, the activities of central banks, statistics, natural disasters. I received a clear and clear answer during the interviews that these factors cannot be 100% excluded, only minimized, and the best way to do this is to use forward transactions. However, for a forward deal to work well for a company, a lot of things have to be taken into account. Such as, the chosen currency pair, volatility, amount of payments, proactive currency hedging strategy and most importantly, the risk rate that a company can bear. However, if we compare the advantages and disadvantages of forward transactions, the use of them will tip the balance in half, because if a small and medium-sized company does not deal with the risk of currency exposure, sooner or later it may signal the end of the company. During the research, I was able to successfully discover the characteristics described in the literature in the case of the interviewees, and I also received effective answers to the research questions. I therefore made the following findings on the sample, the reasons for the non-spreading of financial solutions may be: regional differences, openness to the world, trust, experience and education, the age difference also greatly influenced this issue. It is much more typical of young urban entrepreneurs and company managers to try to protect their own margins with smart solutions and to defend themselves against currency risk, compared to an older rural company manager or economic manager. This analogy is very pivotal, for the actors of the SME sector belonging to the interval between the two, the picture and this issue are very mixed. There are young rural entrepreneurs or perhaps older urban entrepreneurs who are characterized by using some kind of innovative financial solution, but it can also be said that they do not put too much emphasis on avoiding the mentioned problem. But to summarize the reasons for these differences: experience-inexperience, trust-mistrust, openness-reclusion, city-based company-rural-based company, young age group-older age group, these contrasts and aspects determine the prevalence and non-prevalence of forward transactions, In Hungary in the SME sector.

Intézmény

Budapesti Gazdasági Egyetem

Kar

Külkereskedelmi Kar

Tanszék

Nemzetközi Kereskedelem és Logisztika Tanszék

Tudományterület/tudományág

NEM RÉSZLETEZETT

Szak

Nemzetközi gazdálkodás

Mű típusa:	diplomadolgozat (NEM RÉSZLETEZETT)
Kulcsszavak:	currency risk, foreign exchange market, foreign exchange rates, risk management, sme sector
SWORD Depositor:	Archive User
Felhasználói azonosító szám (ID):	Archive User
Rekord készítés dátuma:	2023. Ápr. 20. 13:58
Utolsó módosítás:	2023. Ápr. 20. 13:58

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