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In the context of global economic integration, exchange rates act as a bridge connecting national economies, and fluctuations in exchange rates directly impact the global economy. An exchange rate is the ratio at which one currency can be exchanged for another, representing the value of one country's currency against another's. Additionally, exchan...
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Context 1
... central banks make precise adjustments to respond to fluctuations in the foreign exchange market. However, with the deepening of global economic integration, exchange rate fluctuations not only affect international trade and capital flows but also impact a country's economic security and stability, as shown in Table 1. Therefore, when facing upward pressure on the exchange rate, central banks should consider lowering interest rates to attract foreign capital flows by reducing the cost of loans, thereby increasing the supply of domestic currency in the market to alleviate appreciation pressure [13]. ...Similar publications
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Citations
... Currency fluctuations also create inflationary pressures, disrupt trade balances, and influence FDI, complicating financial stability [20]. Trade imbalances arise in importintensive industries, requiring firms to adjust global value chains (GVCs) in response to currency shifts [7], [21]. To mitigate risks, companies modify production locations and sourcing strategies, balancing short-term management with long-term structural changes [7]. ...
This study investigates the impact of hedging strategies, exchange rate fluctuations, and credit risk on the financial stability of multinational companies in Jakarta. Employing a quantitative approach, data were collected from 140 respondents using a Likert scale (1–5) and analyzed using Structural Equation Modeling - Partial Least Squares (SEM-PLS). The findings reveal that all three factors significantly influence financial stability, with exchange rate fluctuations exerting the strongest effect, followed by hedging strategies and credit risk. The results underscore the importance of robust financial risk management practices in mitigating external uncertainties and ensuring corporate sustainability. This study offers valuable insights for corporate managers and policymakers in fostering financial resilience amidst volatile market conditions.
