Borrowing in foreign currencies may seem attractive to clients, but it’s an option that’s not entirely free from risk. If you earn your income in local currency you should borrow in your local currency.
Why run the risk?
If a company’s revenue is in its local currency and that currency should devalue, or if a foreign currency strengthens, foreign currency borrowing obligations will increase. This will potentially threaten the company’s continuity. As FMO, we can provide local currency financing that can reduce your risk of losses from such currency mismatches.
Local currency financing is a way of converting one form of risk into a possibly more acceptable form: specifically, exposing you to a fixed foreign exchange rate rather than to currency fluctuations.
To learn more about our Local Currency Financing Product, please click here for our leaflet about Managing Your Currency Risk.
For more information you can also contact your FMO investment officer.
