Ireland stands as a beacon for foreign direct investment within Europe. Jason Gaywood, Head of Corporate Solutions at MillTechFX, writes about how this comes with significant currency risk and shares tips on how Irish corporates can implement an effective FX risk management programme.
Following the UK’s departure from the EU, numerous UK-based corporates and financial institutions had to set up operations within the EU to continue operating in the market.
Ireland, with its low corporate tax rate, skilled workforce, generous R&D subsidies and pro-business government became the destination of choice for many.
Foreign direct investment comes with currency management challenges. Multinationals in Ireland have customers, investors and suppliers all over the globe, and so currency shifts can impact their bottom lines.
Despite this, many have traditionally seen the task of foreign exchange (FX) risk management as second order. They transact in FX not because they ‘want’ to, but because they ‘have to’ given their international coverage.
However, we believe it is vital that Irish corporates prioritise their FX risk management strategies to mitigate the impact of currency…
