Too many small and mid-sized companies continue to underestimate their currency risks, according to a recent Nordea study. That’s despite the large and unexpected currency losses many companies have suffered in 2020 and the widespread concerns about company liquidity in the coming three months.
Following the outbreak of COVID-19, the fluctuations in the US dollar, Chinese yuan and euro were far more dramatic than even during the financial crisis in 2008.
This volatility has caused large and unexpected financial losses, especially for Norwegian and Swedish small and mid-sized companies with imports from the US and China. Companies in Denmark and Finland have also been hit, especially in the retail industry.
It also appears that around half of these companies are genuinely concerned about their liquidity over the coming three months. Nevertheless, very few small and mid-sized companies have protected themselves against or even analysed their exposure to present currency risks, which remain high.
Read more about the survey on Nordea Open Insights, and learn also how three different Nordic SME's have dealt with the situation.