Foreign exchange risk

s3w ^rihe @okp of the Rmtt4m woodi! agrwt in 1973, the i!qxwting ad eXpO?ting decisions of firm have been made in an environment @f U-h ad of&m vdd!e excban~ maa. @his environment has inspired *k &&pmmt d a titemtme on tradksg md hedging decisions under fopeigpr exchange rate u ty [e& EU%W jw76), Kawai (19%ng, xi&w& and Zikha (1986)]. The purpose of this paper is to ibstratc the role of foae@ crrrrency 0@&8s in hedging the value of a firm fircing exchange rate uncertainty.

Flower firms play significant role in Kenya economic growth; however, they face uncertain future on their operations due to overreliance on export earning which is affect by exchange rate fluctuation. The study sought to establish the effect of foreign public debt on export earnings of flowers firms in Kenya. The study was guided by classical theory of public debt. The study used descriptive research design to evaluate connection between determinant exchange rate fluctuation and export earning of flower firm in Kenya. The study used both secondary and primary data. The study target population was 100 (accounts and finance managers) working with 30 registered flower firms in Kenya. The study employed structured questionnaires. The research instrument was pilot tested in two flower firms namely Sosian flower firm and Kitale Riverside Flowers before its administration for data collection in the main study. The data collected was subjected to relevant processing and analysis whereby the Statistical Package for Social Sciences (SPSS) software was analysis data. Descriptive statistics tools including mean, mode, standard deviation and variances were used. Inferential statistics in form of correlation and multiple regression analyses was also used to analyze data. The research hypotheses were tested at 0.05 level of significance. The study finding indicate that public debt has strong positively and statistically significant of (β 4 = 0.201, p<0.05) on export earnings of flower firms in Kenya. The study recommends that there is need for policy makers and Government to maintain optimal level of public debt in the country bearing in mind that they influence export earnings. This study will be useful to practitioners and policy makers through providing evidence which help in understanding factors affecting export earning of flower firms which will be important for management purpose and development of new policies.

The analysis of the relationship between exchange rate fluctuations, common equity and return on equity is of high importance to be able to improve adequate policies with the purpose of maintaining stability in foreign exchange rate, when it is taken into consideration that mentioned fluctuations lead to the loss in bank capital and profitability. Hence, the studies in the related literature have been increasing in great amount recently. The objective of this study is to investigate the relationship between real effective exchange rate, common equity and return on equity in the period of 2014:01-2018:09. The unit root properties of the series are tested by using Carrion-i Silvestre et al.(2009) unit root test and the cointegration relationship between the series is investigated by employing Maki(2012) cointegration test. Both tests take into account multiple structural breaks. The results indicate that there is only a long run relationship between real effective exchange rate and return on equity for Turkish Banking Sector with structural breaks.