Every importer has experienced this nightmare: you close a contract in dollars, carefully plan your margin—and weeks later, the currency spikes and eats into your profit before the goods even reach the port.
The problem is rarely the volatility itself. The problem is operating without protection.
What is currency exposure and why it matters
Currency exposure is the risk your company faces when it has revenues, expenses, or debts in foreign currency. The longer the time between closing a deal and settling it, the greater the exposure.
An importer that buys in dollars and sells in reais, for example, is constantly exposed. If the exchange rate rises 8% between the order and payment, this variation can consume the entire margin of an operation.
Three practical ways to protect yourself
- Currency lock (NDF – Non-Deliverable Forward): You lock in today the rate you will use in the future. Ideal for companies with predictable cash flow—those that know they will pay X dollars in 60 days and want to eliminate uncertainty.
- Foreign currency account: Maintaining a balance in dollars or euros allows you to buy currency when the exchange rate is favorable and use it when needed, without depending on the market at the worst moment.
- Diversification of suppliers and currencies: Operating with suppliers in different countries—China, Europe, USA—distributes exposure across currencies and reduces dependence on a single currency pair.
The most common mistake: protecting too little, too late
Most companies only think about protection after taking a hit. But effective hedging is advance planning, not a remedy for pain already inflicted.
The practical rule: if a 10% currency variation would compromise your operation, it is a sign that you need structured protection—not luck.
At Swap One, our specialists help companies understand their real exposure and choose the most appropriate strategy for each business profile. There is no universal formula, but there is correct diagnosis.
Want to understand what your currency exposure is today? Speak with a Swap One specialist.
