Predictable exchange rates reduce the need for ________.

Question

Quizplus · Accepted Answer

Predictable exchange rates reduce the risk of currency fluctuations and therefore, the need for currency hedging. A predictable exchange rate means that companies do not have to spend resources on protecting themselves against fluctuations in currency values, which would require them to frequently convert their currency or devalue it. Financial planning and currency conversion may still be necessary even with predictable exchange rates, and are not necessarily reduced.

Predictable Exchange Rates Reduce the Need for ________