ANTICIPATIVNO UPRAVLJANJE DEVIZNIM RIZIKOM U VANJSKOTRGOVINSKOM POSLOVANJU / ANTICIPATIVE MANAGEMENT OF A CURRENCY RISK IN FOREIGN TRADE

Abstract

Foreign trade is an exchange of material and non-material goods across international borders and territories. Every business, including international trade, is exposed to risks due to sudden and unexpected events. Those who are in charge of negotiating business deals, have to be prepared for  eventual risks that may occure and lead to a descrease in operating income.  The goal of a company is not to completely eleminate risks, as they are directly connected with a profitability of the company itself. Risks should be managed. Every company has to   set up a system that will manage risks in order not to have extremely high financial losses.  One of the risks that affects foreign trade is a currency risk. A risk management system must prevent a possible currency risk, since managing risks is a prerequisite for successful sustained business. However, circumstances which directly affect external trade operations can’t be predicted in every case. 
The main goal of this work is to determine how a currency risk is occured and explore the ways of a currency risk management in order to prevent financial losses of the companies that participate in foreign trade.