crisis in 1999. Brazil, Argentina, and Colombia are countries that underwent economic crisis most
frequently
from
1980.
In
1992,
Brazil’s
inflation
rate
reached
1.175%.
Moreover
Brazil
was
supported by IMF bailout in 1998.
The range of fluctuation of the foreignexchange rate in Brazil real shows dramatic movement.
LG Business report targeting B
ADVANTAGE
Cost reduction
- price competitiveness
Local production
-Improve Local Responsiveness
Decrease
foreign-exchange loss
Why?
- Excessive
cost reduction
- Side effects of
expanding overseas
production bases
Case study : Nokia
In 2007, recalled 46,000,000 cell phone battery that supply from Matsushita
In 2009, recalled 14,000,000 cell phone charger that
Introduction
ForeignExchange Market
a market for converting the currency of one country into that of another country
Exchange Rate
the rate at which one
currency is converted
into another
The Functions of the ForeignExchange Market
Currency Conversion
To convert the currency of one country
into that of another country
Insuring against Foreign
Ⅱ. Exchange rate regime
1. What is the exchange rate?
In finance, the exchange rates between two currencies specifies how much one currency is worth in terms of the other. It is the value of a foreign nation’s currency in terms of the home nation’s currency. For example an exchange rate of 91 Japanese yen (JPY, ¥) to the United States dollar (USD, $) means that 91 yen is worth the
foreignexchange risk of the market risk.
The company operates primarily in Korean Won (KRW) and its official accounting records are maintained in Korean Won. The effect of foreign currency risk to net income is a sum of net foreign currency fluctuations of Korean Won against other foreign currency fluctuations. Foreign currency exposure to financial assets and liabilities of a 5% currency rate