Economic FX Rate Exposure Management and Invoicing Currency Determination

경제적(經濟的) 환율노출관리(換率露出管理)와 송장통화결정(送狀通貨決定)

With the rapidly increasing of Korean enterprises, the importance of foreign exchange(FX) risk management for the future operation generated from FDI contract is becoming the critical problem of international business. This type of FX risk, called as "economic exposure risk", requires us of the unique risk management principles and techniques. In this paper, we identify the properties of economic exchange rate exposure, analyze the identification and measurement processes of risk sources and strength, and perform the estimation of the main determinants and its profile effects of the invoicing currency for the efficient management of economic FX exposure.