Textile Sector Embraces Forward Contracts to Manage Currency Risks
Currency risk management in India's textile sector involves using tools like forwards, options, and swaps to protect against currency fluctuations. Companies with growth potential and financial constraints are more likely to use these tools. The study focused on nine textile companies and found that USD and EUR were the most commonly used currencies. Forward contracts were the preferred hedging tool, followed by currency swaps, options, and futures.