Ask the expert

Hamish Muress, Senior Currency Analyst at OFX How can a small business save money in its supply chain? Speaking to many OFX clients regarding their supply chain issues, they often break these issues down into the following: costs, projections and risks. It seems obvious, but it helps to try to reduce your costs across the board, making sure your 30-, 60- and 90-day projections are in place. When it comes to foreign currency strategies, try to reduce the risk of adverse market fluctuations. Managing risk generated by an unpredictable market by utilising 30- to 90day short-dated forward contracts, which lock in today’s rate for delivery later. It’s particularly handy if businesses know they’ll be facing invoices in the next few months. How much more will imports cost if we have a hard Brexit? A hard Brexit will most likely be a lengthy process. At OFX, we work with a number of UK exporting businesses to mitigate a fall in sterling by utilising products like forward contracts to lock in today’s rates for future delivery. A series of forward contracts allows a UK importer to protect themselves against a fall in sterling and a hike in the cost of imports for up to 24 months, while they possibly restructure their costs. On the flip side, many of our marketplace e-commerce clients welcomed the recent fall in sterling, meaning their exports to the continent are now more competitive. The key is to ensure the rise in importing costs does not offset the new comparative advantage of competitive exports.