A money market hedge involves taking a money market position to cover a future payables or receivables position.

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A money market hedge is a common technique used by businesses to manage foreign exchange risk. It involves taking a position in the money market (buying or selling currency forward contracts or using other instruments such as options) to protect against potential losses from currency fluctuations in future receivables or payables. This can help to reduce uncertainty and ensure that the company can meet its financial obligations without being negatively impacted by changes in exchange rates.

A Money Market Hedge Involves Taking a Money Market Position