MANAGEMENT OF FINANCIAL RISKS IN INTERNATIONAL TRADE FINANCING
Abstract: Sale of products with delayed payment, i.e. credit supported sale is a major force ininternational trade and an imperative in today’s business world. In the contemporary internationalcommerce market positions and negotiation power have changed mainly in favor ofbuyers, who on the other hand, regularly request credit – based purchasing. Faced with competitionon the global market, sellers intending to sell their goods and services on the marketare enforced to off er favorable conditions, which is in fact sale with delayed payment. Presenceon the global market off ers possibilities for profi t-making, but at the same time export-orientedbusinesses are surrounded by potential risks. Th e major problem in fact is the re-paymentof the receivables, which is a result of the time interval from the moment when the foreignbuyer will receive the delivered goods to the moment when he will pay the agreed amount.Risk management and exposure management or hedging exposure, are applied frequently byfi nancial managers, managing the funds of a company, in order to enable exposure cover andreduce the potential instability for the company. The exposure management in case of foreigncurrency or exchange exposure represents an integral part of the fi nancial function of the company,which acts globally, primarily multinational companies.International trade transactionsare administered in far more complex conditions than those on the local/national market.Therefore, the stress should be on the crucial importance of the economic and financial riskmanagement in the domain of international trade finance.
Key words: financial risks, risk management, fi nancial transactions, foreign currencypayment, international trade.