Drop in sterling 'hurting small firms'
Nov 03 2008
Small firms are missing out on around £900 million a year as they fail to protect themselves against currency fluctuations, according to new figures.
A report from World First claims small companies are not covering themselves, estimating that 50 per cent of all import and export business is unprotected against exchange rates, according to ThisIsMoney.
The source also reports the recent fall in value of sterling has added financial pressures to firms who deal overseas, with around a fifth of these being small to medium-sized businesses.
Worldwide economic uncertainty has caused a drop in demand, meaning overseas trade worth £141 billion has been affected.
The publication suggests all small firms dealing with foreign currency take out a forward contract, which limits potential losses if exchange rates fluctuate.
Andy Gibson from the Institute for Export says the current varying of rates is affecting some firms greatly and advises hedging against these changes.
On Friday sterling had its biggest fall against the dollar for many years, expected to create the largest percentage monthly loss for the currency since October 1992.
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