Impacts of COVID-19 on Currency Volatility

Kyriba.com Copyright © 2020 Kyriba Corp. All rights reserved.
Impacts of COVID -19 on
Currency Volatility
Practical insights and tips from Kyriba Thought Leaders, Customers and Partners

Agenda and Topics for our Session Today
• Market Insights: Wolfgang Koester
• Common FX Risk Management Challenges in a Crisis Environment: Andy Gage
• Panel Discussion: Insights, Experience and Pragmatic Advice:
Additional Resources and Information
• Currency Impact Report releasing April 9th. Please find on Kyriba website under
resources. https://www.kyriba.com/resources/
• 1.2 CTP Credits sent to your email 3-5 business days after webinar.

Today’s Presenters & Panelist
3
Today’s Moderator
Christine Gilroy
SVP, Enterprise Sales
Kyriba
Wolfgang Koester
Chief Evangelist and
Market Strategist
Kyriba
Andy Gage
VP, Corporate FX
Risk Strategy
Kyriba
Mimi Rushton
Managing
Director,
FX Distribution
Barclays
Michael Murray
Director,
Treasury
Initiatives
The Coca-Cola
Company
Mary Wienclaw
Senior Manager,
Corporate
Accounting &
Treasury
Duracell
Ilya Gonikman
Senior Treasury
Program Manager
Medtronic

Currency Market Insights
Wolfgang Koester

Back to the Future:
We’ve been here before and will be again…

Market Insights:
FX Volatility
Surging
“Fin a n cia l m a rket s h a ve
su ffered a ru de a wa ken in g
t o n ot ion s t h a t vola t ilit y
wa s a t h in g of t h e pa st .
We’re n ow seein g t h e kin d of
m a rket disloca t ion n ot
wit n essed sin ce t h e 2008-09
globa l fin a n cia l crisis,” ING
a n a lyst s sa id, describin g t h e
set -u p a s a “perfect st orm ”
for cu rren cy m a rket s.
6

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Copyright © 2020 Kyriba Corp. All rights reserved.
Market Insights: Very Dynamic Market,
USD strengthening across a wide portfolio of currencies
7
New Currency Crisis
Race to the Top
Budget War
Past Currency Crisis
Race to the Bottom
Trade War

Practical Insights from the
Kyriba Client Community
Andy Gage

What does this mean to Corporate FX Risk
Management Teams
• Long-Term and likely Short-Term Forecasts no longer reflect the new reality
• Treasury has to balance immediate term liquidity needs with protecting the
firm from surging currency volatility
• Balancing hedging objectives with cost of hedging and potentially changing
hedge tenors
• Being prepared for lots of questions from FP&A and the C -suite
9

Questions and Concerns from the C -Suite
What is our true FX risk and what
actions are we taking to manage it?
Do we have exposures in markets that are
highly volatile and costly to hedge?
What actions are we taking internally
to reduce our FX exposure?
Are we able to react quickly to
rapidly changing FX markets?
Is our intercompany positions
complicating our FX risk profile?
?
What is our P&L exposure to COVID
Crisis driven increased FXvolatility

Peer Group Discussion

1
Discussion
Topic
One
How has the Board and C-Suite reacted to the
market volatility created by COVID-19 and
what types of demands and questions are
coming your way?

2
Discussion
Topic
Two
As your team implemented it’s BCP and
remote workforce plan, how did the use of
Cloud-based solutions aid in the transition
and enable you to manage the FX risk?

3
Discussion
Topic
Three
When did your organization realize we where
entering a surge in FX volatility and what were
the initial discussions and resulting actions?
• What types of analysis did you run?
• How did you gain alignment with executives?
• What were your team’s first steps to deal
with the surge?

4
Discussion
Topic
Four
What changes have been made to your firm’s
FX exposure management program and
focus?
• How you define exposure?
• Hedging approaches?
• Internal efforts to reduce exposure?

5
Discussion
Topic
Five
Every crisis always pushes organizations in
new and unforeseen ways, what key learning
or insights have you gained in your initial
responses to the COVID fueled crisis and what
advice would you share with your peers?

Practical Experiences and Thoughts from the
Kyriba FX Customer Base
• Know your exposures
• Shorten your time horizons
• Increase frequency of monitoring exposures and positions
• Monitor Cash and Intercompany positions to reduce unnecessary exposures
organically, avoid the self inflected loss
• Revisit assumptions regarding your budget and cash flow forecasts
• Hedge Tenor for the Balance Sheet: Shorter or Longer?
• Monitor exposures and liquidity needs in tandem
17

Questions from the Audience?

Impacts of COVID-19 on Currency Volatility

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