As businesses set their budget rates in the lead up to 2024, our experts weigh in on why it’s important to have one, how to arrive at the right rate for your business and which macroeconomic factors to consider in the process.
A budget rate is an internal reference exchange rate set by businesses with international cash flows. Hedging strategies are used to protect the budget rate. An effective budget rate allows businesses to improve their ability to forecast cash flows over a specific accounting period and effectively measure business performance.
To establish your business’ budget rate, first consider these two key principals:
- Attainability: Ensure that the rate you set is realistic and achievable.
Argentex Group plc (LON:AGFX) is a leading provider of bespoke currency risk management and payments solutions for businesses and financial institutions