Hedging Foreign Exchange Exposure for Foreign Currency Risk

This study explores the impact of hedging foreign exchange exposure on managing currency risks among five tea exporting companies in Rwanda. Using a descriptive and correlational design, data was collected through questionnaires and interviews with 50 respondents. Findings revealed that hedging transaction, translation, and operational exposures significantly influence currency risk control, explaining 97.8% of the variation. The study recommends evaluating cash flows from hedging techniques, promoting diversification, and avoiding inaccurate earnings forecasts to enhance risk management. Further research on factors hindering effective currency exposure management is suggested.