Journals Information
Universal Journal of Accounting and Finance Vol. 10(1), pp. 95 - 101
DOI: 10.13189/ujaf.2022.100110
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A Study on the Perception of SMEs on Foreign Exchange Risk Management
B. Vijayalakshmi 1,*, G. Subashini 1, M. Jayalakshmi 2, C. Umayal 1
1 Department of Business Management, Sri Padmavati Mahila Visvavidyalayam, (Women鈥檚 University), Tirupati-517502, India
2 Department of Management Studies, Siddhartha Institute of Engineering & Technology, Puttur-517583, A.P., India
ABSTRACT
The promotion of Small and Medium enterprises (SMEs) has continued to remain an important and integral part of Indian development strategy and is known to play a vital role in the global economic landscape. Despite the fact that Government of India has formulated many policies to promote export expansion of SMEs, they have traditionally focused more on domestic markets and the export performance of this sector in the global market has been unimpressive. Although SMEs want to exploit the international opportunities and want to become more export oriented, many barriers impede the growth performance of Indian SMEs to meet the challenges of emerging trends in globalization. This paper specifically aims at finding the perception of the SMEs in determining their hedging strategies to mitigate the foreign exchange risk. The study is performed by considering primary and secondary data. The primary data were collected from 71 selected export traders through structured questionnaire and analyzed using suitable statistical tools. From the study, it is concluded that the SMEs with high turnover prefer to adopt currency derivatives, especially forward contracts whereas the SMEs with lower turnover prefer natural or non-hedging strategy. It is also recommended that the banking sector can also step forward to give information on currency price movements to their clients as an additional service.
KEYWORDS
FX Rate, Conversion Risk, SMEs, Hedging Strategies, Risk Perception
Cite This Paper in IEEE or APA Citation Styles
(a). IEEE Format:
[1] B. Vijayalakshmi , G. Subashini , M. Jayalakshmi , C. Umayal , "A Study on the Perception of SMEs on Foreign Exchange Risk Management," Universal Journal of Accounting and Finance, Vol. 10, No. 1, pp. 95 - 101, 2022. DOI: 10.13189/ujaf.2022.100110.
(b). APA Format:
B. Vijayalakshmi , G. Subashini , M. Jayalakshmi , C. Umayal (2022). A Study on the Perception of SMEs on Foreign Exchange Risk Management. Universal Journal of Accounting and Finance, 10(1), 95 - 101. DOI: 10.13189/ujaf.2022.100110.