To reduce economic exposure when a foreign currency has a greater impact on cash inflows than on cash outflows, an MNC could reduce its level of foreign sales, increase its foreign supply orders, or restructure debt to increase debt payments in the foreign currency.

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When a foreign currency has a greater impact on cash inflows than on cash outflows, this is called a net long position. To reduce economic exposure, the MNC could take actions such as reducing foreign sales (thereby reducing cash inflows in the foreign currency), increasing foreign supply orders (thereby increasing cash outflows in the foreign currency), or restructuring debt to increase debt payments in the foreign currency (thereby reducing cash inflows in the foreign currency).

To Reduce Economic Exposure When a Foreign Currency Has a Greater