Abstract :
Foreign exchange is the currency issued and used as a legitimate international
payment in other countries has a record of the official exchange rate at the central bank.
Fluctuation in foreign currency is such a risk for companies that import goods.
However, the actual risk could be minimized through hedging techniques.
In these circumstances, author wants to do a case study of CV. X, which has an
importing goods process in their business activity. Author wanted to compare how the
effect of using the forward contract hedge and money market hedge could minimize these
risks.
Based on research stretcher, it was found that money market hedge technique is
the one that could minimize the risk of currency fluctuations faced by company and could
give the company a financial benefit at the same time.
Keywords: foreign exchange, forward contract hedge, money market hedge.