Samoa Tala Harvard Case Solution & Analysis

This case of currency risks faced by microfinance institutions, and evaluate strategies to hedge their countries with pegged exchange rate regimes and not derivatives. MFI based in Western Samoa is in different currencies, the U.S. dollar and New Zealand dollar is concerned about the additional variability in its cash flows due to unexpected fluctuations in exchange rates, and wants to learn strategies for hedging risks in the absence of the derivatives market Samoa Tala. It seems that the president of the company, that loans in different currencies at a rate equal weights of currencies in the basket peg would reduce currency risks. He wants to evaluate the exact weight of the currencies in the basket peg and measure to reduce currency risk with this strategy. "Hide
by Joshua Kowal D, Bhagwan Chowdhry, Konark Saxena Source: Harvard Business School 20 pages. Publication Date: September 24, 2008. Prod. #: 209053-PDF-ENG

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