How might a firm ensure its prices abroad do not rise? (currency exchange rates, etc?)?



Answer:
Are you talking about selling price in overseas market?

I guess a firm can negate currency fluctuations at a price by engaging in futures. Say a firm in India manufactures samoosas in Bombay, freezes then and exports then to the USA.

If the exporter wants the buyer's price not to change, all the exporter has to to is to charge in $. Therefore, to the importer, the price is unchanged whatever happens to the exchange rate and the price of samoosas in the US does not change.

Now, to ensure that it doesn't take undue currency risks, say in case the $ suddenly loses value with respect to the Indian Rupee, the exporter can lock in the exchange rates by buying futures.
More Questions and Answers:
  • What is 2,000,000euros equal in american dollars?
  • How does economics affect your daily life?
  • an appreciation of the chinese currency would help the U.S. deficits?
  • what is the Muqaddimah? what is your review?
  • 5. In a traditional economy, decisions are made according to customs and tradition. How are these choices mad
  • why india adopted the policy of privatisation?
  • what is the relationship between unemployment and poverty?
  • what is the difference between asia and africa?
  • Why Indian growth story is widening the gap between rich and poor instead of bridging it .?