Currency risks, government procurement and counter-trade: a note
Government agencies that procure goods from abroad typically face various risks, particularly uncertainty over future real prices. Interestingly, the agencies can use a counter-trade transaction to solve the real price problem. Because both sides of a counter-trade deal are real goods, not financial instruments, counter-trade can solve the inflation risk involved in foreign currency procurement. Counter-trade therefore can sometimes dominate financial instruments as a way to hedge.
Year of publication: |
2003
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Authors: | Choi, Sang-Rim ; Tschoegl, Adrian |
Published in: |
Applied Financial Economics. - Taylor & Francis Journals, ISSN 0960-3107. - Vol. 13.2003, 12, p. 885-889
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Publisher: |
Taylor & Francis Journals |
Saved in:
Online Resource
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