Futures contract: minimizing tool of currency risks for foreign economic activity
Keywords:
currency risk, exchange rate, financial expenses, forecasting methods, futures operations, forward contract.Abstract
Background. One of the financial risks inherent in foreign economic activity is currency risk, which arises as a result of exchange rate fluctuations. For Ukraine, which is characterized by excessive openness and permanent devaluation of the hryvnia to the US dollar and the euro, the problem of currency risk minimization becomes particularly relevant.
Analysis of recent researches and publications. The problem of managing currency risks at domestic enterprises - subjects of foreign economic activity are studied by Ukrainian researchers, because the Association Agreement between Ukraine and the EU promotes the growth of export-import operations, which leads to an increase in settlements in foreign currency. However, the issue of achieving positive effects of currency risk management in terms of strengthening the processes of European integration using futures contracts is not sufficiently highlighted.
The aim of the article isthe analysis of the influence of fundamental factors on the dynamics of the exchange rate and the identification of problems and prospects for the development of derivative financial tools as a means of minimizing currency risks.
Materials and methods. The works of domestic and foreign scientists, statistics of the State Customs Service of Ukraine, and the National Bank of Ukraine are used. Methods of system generalization, qualitative and quantitative analysis, comparison, grouping are applied.
Results. The source of currency risk is the uncertainty of the exchange rate, which leads to currency losses due to changes in the exchange rate of foreign currency in relation to the national in the implementation of foreign trade operations. World currency exchange risk management uses derivative financial instruments, both non-exchange, and exchange-forwardand futures contracts. The development of the derivative tools market in Ukraine is low and characterized by a declining trend. The problems that impedethe use of futures in the Ukrainian market are identified –the imperfection of the regulatory framework, the divergence in terminology, the lack of common approaches to the regulation of the stock exchanges, and the non-compliance of Ukrainian legislation with the legislation of the European Union. To resolve them, it is proposed to make changes to the basic normative acts of Ukraine in order to create the legal field and settlement of relations associated with derivative financial tools, in particular futures contracts.
Conclusion. Expansion of international cooperation of Ukraine, growth of export-import operations in the terms of foreign trade liberalization and transition to a flexible exchange rate formation increase the probability of occurrence of various risks in foreign economic activity, which actualizes problems of development and use of currency futures to minimize them. For the effective use of currency futures by enterprises –entities of foreign economic activity it is necessary to create a coherent legal and regulatory framework for the issuance, circulation and redemption of securities with clear terminology and the definition of guarantees for the implementation of futures contracts, taking into account the provisions of the legislation of the European Union.
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