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Survey evidence on the exchange rate exposure of Hungarian SMEs

Author

Listed:
  • Katalin Bodnár

    (Magyar Nemzeti Bank (central bank of Hungary))

Abstract

During the past year, a survey was conducted among Hungarian small and medium enterprises. The results of the survey suggest that a significant ratio of companies is directly exposed to fluctuations in the exchange rate, which may affect their profitability to a large degree. The majority of surveyed companies, however, are not prepared for the potential effects of such fluctuations and do not use foreign exchange risk management tools. Indebtedness in foreign exchange could serve as the hedging against exchange rate risks, but enterprises mainly use it to minimise monthly repayment; therefore, the foreign exchange debt increases their exchange rate risks.

Suggested Citation

  • Katalin Bodnár, 2006. "Survey evidence on the exchange rate exposure of Hungarian SMEs," MNB Bulletin (discontinued), Magyar Nemzeti Bank (Central Bank of Hungary), vol. 1(1), pages 6-12, June.
    • Handle: RePEc:mnb:bullet:v:1:y:2006:i:1:p:6-12
    as

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    File URL: http://www.mnb.hu/letoltes/mnb-bull-2006-06-katalin-bodnar.pdf
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    References listed on IDEAS

    as
    1. Mr. Gianni De Nicolo & Mr. Patrick Honohan & Mr. Alain Ize, 2003. "Dollarization of the Banking System: Good or Bad?," IMF Working Papers 2003/146, International Monetary Fund.
    2. Morris Goldstein & Philip Turner, 2004. "Controlling Currency Mismatches in Emerging Markets," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 373, October.
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    Cited by:

    1. Juliana Salomao & Liliana Varela, 2022. "Exchange Rate Exposure and Firm Dynamics [Credit Constraints and the Cyclicality of R&D Investment: Evidence from France]," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 89(1), pages 481-514.

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    More about this item

    Keywords

    exchange rate exposure; FX loans; FX risk management; SME; survey.;
    All these keywords.

    JEL classification:

    • C42 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Survey Methods
    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General

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