Management methods currency position

The essence of the first group of methods is the impact on the currency composition of balance to limit the effects of revaluation of currency instruments. These methods include: structural balancing currency flows on amounts and timing, conduct foreign exchange operations, changing the timing of monetary payments (lead and lag). In general, this is - the traditional techniques that are widely used in practice, foreign banks and to some extent used in the home. Structural balancing currency flows on amounts and timing of matching volume and timing of active and passive operations with all the foreign currencies, which operates the bank so that it is possible to close a currency position, or to reduce its volume to an acceptable level. The method of structural balance can be applied to any balance sheet operations with foreign currency: currency conversion, the conclusion of loan and deposit contracts in foreign currency, foreign exchange and coordination of payments; restructuring payables and foreign currency debt, purchase and sale of securities denominated in foreign currency . The volume and timing of these operations commute so that it is possible to close the foreign exchange exposure or reduce their volume to an acceptable level. Category: Management Operations Commercial Bank