Stanbic Bank Tanzania hosted a Hedging Forum in Arusha 22nd November 2017 for its commercial and corporate clients, to discuss effective ways on how to manage currency and interest rate risks in their businesses.
Stanbic is amongst the few banks that currently offer forex and interest rate hedging solutions in Tanzania.
Standard Bank’s Executive & Head (Client Solutions, Africa Regions, Global Markets), Reginald Mlangeni stated that a currency hedging strategy can protect a company if the value of a currency falls sharply.
Hedging is a risk management strategy used in minimising or offsetting probability of loss from fluctuation prices of commodities, currencies or securities.
“All companies are exposed to market risks arising from a combination of business activities. This may result in currency and interest rate risks. These market risks have a great impact on profitability and operations of the company. Having identified these risks, companies should be in a position to follow proper risk mitigation procedures by using derivative instruments to moderate their exposures,” he said.
Speaking during the forum, Stanbic Bank Tanzania’s acting Head of Global Markets, Ester Manase mentioned the potential instruments that can be used for the purposes of managing risks which are; interest rate swaps, forward contracts, currency and interest rate options, citing that they can be used either in isolation or collectively.
“Stanbic Bank aims to continue being the dominant provider of hedging solutions in its markets. We assist clients in identifying risks resulting from their chosen funding and operational frameworks, exploring optimal solutions for mitigating these risks,” she said.
Stanbic Bank Tanzania
Stanbic Bank Tanzania is part of the Standard Bank Group, Africa’s largest bank by assets.
The group has been operating in Tanzania under the Stanbic Bank brand since 1995 focusing on all the key growth sectors in Tanzania, including agriculture, telecommunications, oil and gas, power and infrastructure and fast-moving consumer goods.