Survey evidence on the exchange rate exposure of Hungarian SMEs
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.
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