ASSESSING FINANCIAL RISKS AND MITIGATION TECHNIQUES IN DEVELOPING MARKET MULTINATIONALS

Authors: CH. Swathi

DOI: https://doi.org/10.37082/IJIRMPS.v14.i1.232888

Short DOI: https://doi.org/hbk6sg

Country: India

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Abstract: Abstract
The risk, Exchange rate risk is very important because local currencies are always in flux such that there are either large earnings or lose one in international trade. Credit risks derive from the genuine incertitude regarding the creditworthiness of local partners and consumers, while w liquidity risks are with the type of problema confronting MNCs which want to take up funds, or to offload their liquid stock during a bout of market disruption. Financial vulnerability of MNCs can also arise from operational risks such as supply chain disruptions, and political instability. To avoid those risks, the paper describes some methodologies, such as hedging (e.g. options, futures, or forwards), diversification of the portfolio, and sharing the risk. Moreover, it considers the Insurance, options and strategic alliance as the tools of financial risk reducing. Hedging strategies, in particular, as we mentioned above, they are an essential part of currency and commodity exposure management as MNCs will be able to hedge the exchange rate or commodity price and safeguard their organizations against these liberties on the capital as well as commodity markets. Risk reduction through both geography and product spreading Reduction of exposure to risk from specific markets or segments (not all our eggs in one basket) Joint ventures and partnerships reduce risk, additionally providing access to local learning in unfamiliar markets in particular. The research concludes that the need for proactive risk management through the adoption of effective financial management and systems as well as make use of data analytics to predict and track risks. Financial technology with their decision making processes, risk portfolios and operational efficiencies can be improved. Effectiveness of Emerging Market Risk Hedging Models This paper examines the effectiveness of the models concentrated on the application mechanism in an emerging market context, with case studies and expert interviews with MNCs that have used a variety of risk hedging instruments in emerging markets. Contents It examines how corporate governance works, in particular how risk is monitored and assessed, and the ways that transparency and integrity are designed into the rules that govern how companies are run.

Keywords: Key words : Risk Mitigation Techniques, Financial Risks, Multinational Corporations (MNCs), Currency Risk, Liquidity Risk

Paper Id: 232888

Published On: 2026-01-13

Published In: Volume 14, Issue 1, January-February 2026

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