International Business 9th Edition by Charles Hill

Exercise 23

You are the CFO of a U.S. firm with a wholly owned subsidiary in Mexico that manufactures component parts for your U.S. assembly operations. The subsidiary has been financed by bank borrowings in the United States. One of your analysts told you that the Mexican peso is expected to depreciate by 30% against the U.S. dollar on the foreign exchange markets over the next year. What actions, if any, should you take?