Currency hedging by exporters and importers
This article summarises recent work undertaken at the Reserve Bank on currency hedging by exporters and importers. The work involved interviewing bank staff and business executives, reviewing data sources and previous studies, and undertaking simulations to estimate firms' gains or losses from hedging. It seems that in recent years, hedging activity has had a significant positive impact on exporters' incomes. While the level of hedging activity has apparently changed over time, there are still some issues as to how such changes could be accurately measured and monitored.